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HUD approves $4.2 billion for Louisiana's rebuilding program
7/11/2006, 5:40 p.m. CT
By BRETT MARTEL The Associated Press

NEW ORLEANS (AP) — The federal government will pay $4.2 billion into a program to help Louisiana residents rebuild or sell houses severely damaged by Hurricanes Katrina and Rita, officials said Tuesday.

The Department of Housing and Urban Development also announced it would provide $1 billion for hurricane-related housing needs in Mississippi, Texas, Alabama and Florida, and called on those states to apply for the additional money.

Louisiana's $4.2 billion will be added to federal allocations the state had already received to fully fund its more-than-$9 billion "Road Home" program for hurricane recovery.

The money "seals the deal for Louisiana," Gov. Kathleen Blanco said after HUD deputy Secretary Roy A. Bernardi presented her with a large mock, light-blue check. "For the first time we can guarantee that we have all the funding we need ... . We will bring back our communities devastated by both Katrina and Rita — two pretty vicious hurricanes."

The "Road Home" program is intended to provide Louisiana residents up to $150,000 to rebuild or sell houses severely damaged by the storms, using grants to cover repair costs above what was covered by insurance policies and FEMA grants.

About 123,000 home owners and owners of about 80,000 apartments are eligible for the program, state officials have said. About 90,000 have already signed up, officials said.

The money directed toward repairing rental properties should reduce apartment shortages that have driven up rents in hard-hit areas, further complicating rebuilding efforts since workers have trouble finding places to stay.

Increasing insurance premiums for landlords who own rental units in areas hard-hit by Hurricane Katrina on Aug. 29 or Rita on Sept. 24, also have contributed to increased rents, which have shot up by 20 percent or more in many cases — another obstacle to displaced residents who want to return.

"It was clear to me that Louisiana desperately needs this additional funding to implement its plans to bring its citizens back home," Bernardi said.

Blanco has said that the Louisiana Recovery Authority, which oversees the program, expects eligible homeowners to begin getting checks by late summer.

"Congress and the American people have handed Louisiana a tremendous victory, and we appreciate your confidence in us," Blanco said. "We are determined to honor this investment."

For people who sell their property and can demonstrate continued permanent residence in the state, the grants cover the difference between a home's pre-storm value and post-storm insurance settlements and FEMA grants.

Owners who take the "sell" option and have moved out of Louisiana can only get 60 percent of their home's pre-storm value.

Blanco said she expected at least 10 offices to open around the state where those who register for the program can set up appointments to receive counseling on their options. The first of those offices was expected to open in Baton Rouge on Wednesday.

The program could save some flooded, historic neighborhoods in areas protected by rebuilt levees. New Orleans' Broadmoor and Mid-City neighborhoods are two areas where old homes could be saved but have stood mostly abandoned since the storm because residents, a number of whom were not required to have flood insurance, did not have enough money to rebuild.

"People need these resources to build their lives their back," said LaToya Cantrell, Broadmoor Improvement Association president, who registered for the program and hopes to qualify for at least $15,000 to $20,000 to finish fixing up the property.

With insurance covering much of her damages, she was among the more fortunate in a neighborhood where some now live on the second floor of flood-damaged homes, their gutted lower levels leaving them vulnerable to burglaries and without effective air conditioning.

"People are living in conditions that are just deplorable and they're property owners," Cantrell said. "They are abiding citizens. They own a piece of America."