State submits new plan to help Road Home recipients complete rebuilding

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wwltv.com

Posted on May 15, 2013 at 5:33 PM

Updated Wednesday, May 15 at 5:59 PM

David Hammer / Eyewitness News
Email: dhammer@wwltv.com | Twitter: @davidhammerWWL

NEW ORLEANS -- The state presented plans Wednesday to help certain Road Home grantees with additional grants and loans, as well as one-on-one assistance with their case files, offering a rare bright spot for still-struggling homeowners.

“People should know that they might be able to get some more help from Road Home and that's a really exciting moment,” said M.A. Sheehan from the Lower 9th Ward Homeowners Association. “It won't help everybody. It will only help people who are not fully home yet.”

And in another huge development, part of the state’s plan would give relief to homeowners who received $30,000 “Elevation Incentives” as parts of their original Road Home grants.

The state proposal to the federal Housing and Urban Development department seeks to “clarify” that if a grant recipient spent the elevation portion on repairing Katrina or Rita damage but then didn’t have enough money to elevate the fixed house, they should have the chance to “reclassify” their Elevation Incentive so it just becomes a part of their compensation grant.

The proposal for sending additional grant money will be for those who got money before but lost it to contractor fraud, contaminated drywall or mortgage lenders who demanded that they use their rebuilding aid to pay off loan principal balances.

That should be good news for Central City homeowner Cheryl Young, who told us two weeks ago that she lost most of her Road Home funds when her contractor took off and ended up in a Georgia jail.

“Those are exactly the sorts of things that we’re trying to address through these action plan amendments -- is the people who through circumstances beyond their control have had their opportunity to get back home taken from them,” said Pat Forbes, executive director of the state agency overseeing the Road Home, the Office of Community Development.

Even those who didn’t suffer those problems might benefit from a new case management program provided by Road Home, through a combination of state staff, contractors and non-profit community groups. And those who don’t intend to come back will also have a process to settle their cases, either by paying back grant money they didn’t use on rebuilding or by handing their vacant or abandoned properties over to the state Land Trust.

If approved by HUD, the “Action Plan Amendments” will let the state pay additional grants or use grant money to pay off private construction loans, which the state is working with lenders to set up.

Ironically, by teaming with banks to pay off construction loans as work is completed, the Road Home will – only at the very end -- be the construction program former Gov. Kathleen Blanco originally envisioned, before HUD stepped in on March 16, 2007, and forced the state to go to lump-sum, up-front payments where the use of the money was not monitored.

That resulted in the state, over the last several years, scrambling to figure out who has complied with covenants requiring them to rebuild and reoccupy, and who has not. Recent reports by state and federal auditors raised questions about how many grant recipients had complied. And the state has had trouble determining that as well because it is relying on grant recipients to self-report their rebuilding progress.

Forbes believes the new case management process will allow the state to better assess who is really trying to get back home and who isn't.

“Now that we have all the tools in place that we need to help people get back home, we are also in a position to say, ‘If you cannot avail yourself of these tools and if you choose not to rebuild then we have a (grant) recovery process to go through.’”

 

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