Miss. CU Officials Press For Details On Katrina Relief Plan
State officials are expected to begin accepting applications as early as this week for a new program that will provide property owners whose homes were damaged by Hurricane Katrina with up to $150,000 in grants.
Gov. Haley Barbour said last week he will use as much as $4.5 billion in Community Development Block Grants awarded by the federal government to provide small grants to uninsured property owners whose homes were damaged by Hurricane Katrina. The state will use the funds to provide relief to each homeowner whose property was not covered by flood insurance.
While the grants are aimed at individual homeowners, they will provide as much relief for credit unions and other lenders that hold the liens on the damaged properties.
The Federal Emergency Management Agency expects to pay out as much as $23 billion in flood insurance claims for Hurricane Katrina, but officials estimate twice as much property in Mississippi, Louisiana and Alabama flooded by the massive storm was not covered by flood insurance.
Charles Elliott, president of the Mississippi CU Association, who has been working with state officials on a flood-insurance backstop, said the requirements to obtain the funding are that property owners must have incurred damages of 51% or more of the value of the structure and the owner must agree to make repairs consistent with new standards for flood insurance, including raising the elevation of the structure. Recipients must also agree to take out flood insurance with the FEMA's National Flood Insurance Program.
"This will allow homeowners to pay for repairs," said Elliott, who still was working with state officials last week on details of the relief program. As many as 55,000 applications for the relief are expected in Mississippi and about 35,000 homeowners are expected to qualify, according to Elliott. Members at four Mississippi credit unions-Keesler FCU, Singing River FCU, Navigator CU and Gulf Coast Community FCU-where the brunt of the hurricane damage occurred, are expected to be eligible for the relief grants.
Details of the program, such as whether the checks will be delivered to property owners or their lenders, are still being worked out by the U.S. Department of Housing and Urban Development, said Elliott.
The grant program means that legislation proposed by Mississippi's congressional delegation to allow affected property owners in Mississippi, Louisiana and Alabama to buy flood insurance through the NFIP retroactively is probably dead.
The Mississippi program will provide up to $150,000 in grants or the insured value of the home, whichever is less, minus any insurance proceeds or payments from FEMA, not to exceed the value of the damage.
If the homeowner has received a loan from the Small Business Administration to pay for damages, the grant will be used first to repay the SBA loan.
To qualify for the grants the home must be owner-occupied as of Aug. 29, 2005 and located in Jackson, Hancock, Harrison or Pearl River counties. Second homes or rental properties will not qualify. The home must also be located outside the federally designated 100-year flood plain, yet flooded due to Hurricane Katrina. The homeowner must have had homeowners' insurance.
One of the major sticking points of the plan is the requirement that homeowners rebuild their structures to higher elevations, according to Elliott. State officials were working with HUD last week to develop guidelines on that requirement.