Katie Moore / Eyewitness News

NEW ORLEANS -- The thousands of Road Home properties from people who decided not to return after Katrina have been sitting in government hands for years. At the same time, more than $50 million, set aside by HUD to help rebuild New Orleans, has remained untouched.

The money was dedicated for a soft second mortgage program to help close the gap for homeowners who can't get financing for the entire cost of a home.

That funding gap is what Rebuild Now New Orleans is all about.

It's both a job and a passion for Executive Director Tess Monaghan.

'We know most people didn't get enough insurance or Road Home to rebuild,' she said.

So, she and her team help them get the extra funding, either through grants or private loans.

But there are $50 million in HUD block grant funds for New Orleans that she, and everyone else, can't tap into.

'The city, the state, whoever is in charge of this money has not been able to get it together to put the money into the hands of the developers or end users who need it,' Monaghan said.

Five years ago, the Louisiana Recovery Authority tied the money to Road Home properties that residents who didn't return sold to the state. The $50 million dollars is supposed to help redevelop them, because in flooded areas, it often costs more to rebuild a house than it ends up being worth.

'They would put some of their money into it, or get some pre-approved financing. The soft second money at some level would be added in to assist buyers to bring those costs down to some sort of affordable levels,' said Mike Taylor, executive director of the Louisiana Land Trust.

Most of the LLT properties, that the money is tied to, are now vacant lots and this program was supposed to put new homes on them. But because so many of them have yet to be sold, no one can access the money.

'The tragedy at this point is that there is $52 million dollars sitting in a bank account somewhere that could be used to re-develop New Orleans,' Monaghan said.

The program was originally placed under the Finance Authority of New Orleans, a quasi-city agency. Its executive director said they bowed out of the administration of the program last year, after the Landrieu administration said they wanted to re-evaluate the program.

'Those dollars, I think are now gonna be administered by the city of New Orleans. And they're trying to get that program up and running as we speak,' Taylor said.

Deputy Mayor Cedric Grant wouldn't do an interview, but in an emailed statement said, 'The state has committed to keeping the funds in New Orleans to help get properties back into commerce and we are jointly developing new CDBG-funded programming.'

A group of housing non-profits recently submitted their proposal to the city for getting the money moving in the right direction, and even though it expands access to the money, Monaghan is still skeptical the money will ever get where it needs to go.

'By the time that you saw their plan to go into action, it would be years from now,' she said.

The Housing Alliance's recommendations would expand the reach of the program beyond LLT properties, to existing property owners who are looking to rebuild.

We contacted HUD to see if there's a deadline to use the funds or lose them, but HUD didn't get back to us.

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