Delvin Coston has his receipts ready.

Documenting his family's recovery from two feet of water in August, a thick stack of loan documents and bills sits in a leather bag in a locked office at their house off North Flannery Road: $61,489.85 for the contractor, $18,640 for Rooms to Go for furniture, and many, many others paid with a low-interest U.S. Small Business Administration loan.

The 31-year-old Baton Rouge man is a father of three — daughters 8, 7 and 2 — and his wife is now expecting another child. He is holding out hope that the state's $1.6 billion flood recovery plan will eventually reimburse his growing family for post-flood costs by defraying a portion of his loan.

While his family was able to return to a newly renovated home in early February, the SBA loan also saddled Coston with major debt. He has the original $118,000 mortgage for the house he bought in 2014 and now the $89,500 SBA loan mortgage on top. With an $1,100 monthly note, Coston said money is tight.

"The bottom line is I just want something. I just want some of the money. I know I may not even get half, but if I get something, something is better than nothing to help alleviate the overall time I'll have to pay back on this loan," Coston said. "Unfortunately, I got 30 years on that loan and 30 years on my house, so essentially I'm starting all over again." 

But, as of right now, that won't happen. Despite Gov. John Bel Edwards' desire and his requests to Congress, his administration is saying federal policy won't allow what Coston and many other SBA loan recipients have asked of the state: to provide them with grants to at least partially repay loans. 

It's considered a duplication of benefits. The policy is intended to prevent people from collecting more money through insurance payments, the federal government's post-disaster aid and other sources than their damage requires.

"Until there's a change, we don't have an option," Pat Forbes, director of the state Office of Community Development, told an audience in February at Baton Rouge Community College.

Coston, who works in tire sales and used part of his 401k savings to get started last year, said when he heard Forbes say that at BRCC, it really angered him. Coston said that federal policy is unfairly equating a loan that he must pay back with interest to a future grant that others won't have to pay back at all, punishing people who had the good credit, the gumption and a little means to get started fast.

"I had to take the money because I wanted my children to have a safe place and a place to call home," said Coston, who said his family lived in a cousin's condo while repairs happened.

He and other residents also pointed out that the Federal Emergency Management Agency directed them to apply for SBA loans but no one let them know about the long-term consequence the loans would have as far as duplication of benefits.

"FEMA didn't tell us, nor did SBA," said Terry Lynn Mitchell, 64, who took out a 30-year, $90,000 SBA loan with her husband, Michael, to repair their home that is nearly finished.

SBA helps fill the gap in resources for flooded residents. Neither the Costons nor the Mitchells live in high-risk flood areas, so they were not required to have flood insurance for their home mortgages. 

As of Thursday, SBA has approved about $1.2 billion in disaster loans for the 2016 floods in Louisiana: $1 billion to 15,861 homeowners and renters and another $158 million to 1,596 businesses, said Carol Chastang, an agency spokeswoman. She disputed that SBA doesn't inform applicants about duplication of benefits and pointed to loan provisions that discuss the issue.  

Julie Baxter Payer, Edwards' deputy chief of staff, said in an email last week that the SBA loan question was "one of the most common public comments" that the state Office of Community Development received during about 15 public meetings on the state recovery plan. Homeowners are being asked to start filling out surveys for the plan on Monday, though the money has not yet arrived. 

She said Edwards has been lobbying for a congressional fix to the SBA problem in the next disaster appropriation or a loan forgiveness program and has met with the delegation and federal administrators. Edwards has suggested legislative language and sent letters in early and mid-February to the delegation, President Donald Trump and the U.S. Department of Housing and Urban Development.  

"At this time, the Governor’s Office understands that the Louisiana congressional delegation is continuing to work on this issue, but that no final solution to this federal problem has been confirmed," Payer said.

HUD administers the Community Development Block Grant program, which is the source of funding for the state flood recovery plan.

Edwards and FEMA took a few lumps last week before a congressional oversight committee as members, including U.S Rep. Garret Graves, R-Baton Rouge, criticized the state's flood response.

While Graves did not respond to requests for comment by Friday, other members of the delegation said they support a fix and have been lobbying on the state's behalf.

“As I have said a number of times before, federal disaster recovery statutes are overly complicated and often lead to unfair results," said U.S. Rep. Cedric Richmond, D-New Orleans, who also represents parts of the Baton Rouge area.

While Richmond suggested the regulations need modernization, the policy change that Edwards and others are lobbying for now was actually required by SBA after Hurricane Katrina more than a decade ago and fought then by devastated residents across the state. 

Walter Leger Jr., a lawyer who led post-Katrina housing recovery under the Louisiana Recovery Authority, said people then wanted to be able to "stack" SBA loans with additional Louisiana Road Home dollars to help with their rebuilding costs. But SBA required that Road Home grants, which also came through HUD's CDBG dollars, be used to pay down the SBA loans, he said.

Leger, who said he argued the policy was taking one from one pocket of the federal government and giving it to another, blamed a tangle of bureaucratic rules that may have been aimed at preventing fraud but ended up hindering the recovery. But he called the newer SBA prohibition on using the CDBG recovery money to pay off loans "ridiculous."

"I was just astonished," Leger said after hearing recently about the requirement. "I couldn't believe it because we thought it was bad enough for us."

The new prohibition is the result of a November 2011 guidance reached between HUD and SBA. The guidance bars using CDBG money to pay off SBA loans and considers the entire SBA loan amount for which someone is deemed eligible as the "benefit" not to be duplicated.

This guidance came at the urging of SBA's Office of Inspector General after the agency found fault with the old SBA policy and other post-disaster practices. The 2010 report concluded that the use of $925.6 million in CDBG recovery money to pay down SBA loans after disasters in Mississippi, Louisiana and Iowa deprived other needy victims of potential aid.

"According to HUD officials, after CDBG program funds were depleted, it was necessary to obtain congressional approval of an additional $3 billion supplemental appropriation for Louisiana," the audit adds.

James Fossett, director of the Rockefeller Institute of Government, an independent think tank within the State University of New York system, said New York ran into similar kinds of duplication of benefits issues after Superstorm Sandy in 2012 involving SBA loans, flood insurance payments and that state's recovery program.

Under federal rules, SBA is the one of the government's front-line post-disaster aids, along with some FEMA programs. State recovery programs funded through CDBG take longer and, under HUD rules, are programs of last resort.

"So it’s a result of the time difference between when SBA can hit the ground and when CD(BG) money comes online, which Congress has to vote on it separately, the state has to put together what the actual programs are and then the feds have to approve that," Fossett said.

Democratic New York U.S. Sen. Chuck Schumer and other members of that delegation successfully argued for a waiver of some duplication of benefits rules in 2015. Schumer pointed to a provision within the Stafford Act that he said gave HUD the ability to grant waivers, though the New York waiver was in the context of allegations of fraudulent low-balling by insurers. 

In Louisiana's bid for relief, Payer said, state officials even raised an idea discussed in the first years after Katrina. HUD could consider as the "benefit" only interest savings that a low-interest SBA loan would provide compared with the interest cost of a private market loan.

But Payer said HUD officials again pointed back to the 2011 guidance and another issued last year with the state's flood recovery appropriations.

The 2011 guidance, however, does say that the state can, "on rare occasion and in extraordinary circumstances, contend that the payment of SBA loans with disaster recovery CDBG for a beneficiary is justified in keeping with all associated laws and regulations."

HUD spokespeople last week did not respond to questions about that language.

Meanwhile, Delvin Coston and the Mitchells said they are waiting to see what help the state can provide.

During a recent interview in their mostly finished home, Terry and Michael Mitchell recalled how readily they signed on with SBA when they were out of their flooded home but sighed now at the thought of 30 more years of debt, ending when Terry will be 94 and Michael will be 88.

"Yeah, I was supposed to be retiring," said Michael, 58, who repairs elevators. "Now I got to continue to work." 

Follow David J. Mitchell on Twitter, @NewsieDave.