Thousands of Louisiana homeowners who have been blocked from receiving flood recovery assistance because of the "duplication of benefits" trap may finally be able to qualify for aid in the coming months, after the state’s two U.S. senators acted on the issue Thursday.
U.S. Sen. John Kennedy, R-Madisonville, and U.S. Sen. Bill Cassidy, R-Baton Rouge, met with U.S. Housing and Urban Development Secretary Ben Carson in the Vice President’s Office to try to address the hang-ups that have prevented people whose homes flooded in 2016 from tapping into federal assistance if they sought SBA loans.
“I’m tired of screwing with this,” Kennedy told reporters after the meeting.
But he said the meeting with Carson was productive and he now expects that the next step in the process will come by the end of April. The issue faces one final hurdle within the Trump administration before homeowners will be able to receive recovery dollars, so it’s unclear when residents will be able to access the funds.
Louisiana received more than $1.7 billion from Congress to aid recovery from the 2016 floods that affected thousands of families. The bulk of the money, about $1.3 billion, has been designated to go toward homeowner rebuilding assistance, but a federal rule has restricted homeowners who received Small Business Administration loans from reaping the full benefits of the program.
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Members of the Louisiana delegation spearheaded efforts last fall to eliminate the requirement that SBA loans count against Restore Louisiana grants, but months later HUD hasn't yet released federal guidance required for the state to begin distributing money to newly-eligible homeowners.
President Donald Trump signed those changes in the federal Stafford Act into law in October.
An estimated 6,000 Louisiana residents who took out or applied for loans from SBA could be affected by the change.
One Denham Springs couple, fed up with the delays, has sued the Trump administration on Monday over the issue.
As in previous disasters, affected homeowners who sought SBA loans have been unable to tap into grant dollars that duplicated whatever loan amount they were deemed eligible to receive – even if they never accepted the loan money.
For example, a homeowner with an estimated $25,000 in damage who qualified for a $20,000 SBA loan would only be eligible for $5,000 in grant money, which doesn’t have to be repaid. Meanwhile, a homeowner who took on the same value of damage – $25,000 – but didn’t apply for a loan could potentially receive for the full $25,000 grant if all other qualifications were met. In many cases, SBA loan awards were larger than the value of total damage, leaving homeowners without an opportunity for any grant assistance.
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The rift has continued to impact communities as they struggle to recover from the August 2016 floods in the Baton Rouge area and other parts of southern Louisiana and the March 2016 floods in north Louisiana. Officials have repeatedly said that the “duplication of benefits” issue has created the biggest problems for homeowners and spawned the most complaints about the state’s efforts to rebuild.
After HUD’s ruling is issued next month, the Office of Management and Budget will also have to act. Kennedy and Cassidy expect to meet with OMB acting director Russell Vought the week of March 25 to expedite the process.
“If we can’t work this out, then by God that’s why we have a president of the United States,” Kennedy said.
Cassidy and Kennedy recently resorted to a parliamentary tactic to try to get the federal government's attention to the issue by holding up the Trump administration’s HUD nominees.
Louisiana's two senators have resorted to a parliamentary tactic attempting to force the federal Department of Housing and Urban Development t…
Cassidy said he told Carson Thursday that the hold would be lifted if HUD acts.
“Louisiana families are still waiting to put their lives back together, and they’ve waited far too long,” he said. “I made this clear to Secretary Carson, and emphasized how deeply this mess has hurt Louisiana homeowners."