New Orleans Homeowners Find The RoadHome
WASHINGTON - (06/01/06) -- Department of Housing and UrbanDevelopment Secretary Alphonso Jackson traveled to New Orleans'French Quarter this week to announce a bailout plan that will allowthe state of Louisiana to use Community Development Block Grantfunds to provide up to $150,000 to uninsured homeowners to repairhomes badly damaged or destroyed by hurricanes Katrina and Rita.The 'Road Home Program' will be as much of a bailout for creditunions, banks and other mortgage lenders, which hold the mortgageson all of the damaged properties. So far, Congress has appropriated$4.2 billion of the estimated $8.8 billion required to fund theprogram, meaning lawmakers will be asked as part of an emergencyfunding bill to provide the remaining $4.6 billion needed. Underthe program, the funds, minus insurance settlements and othergrants, will go to homeowners whose primary residences weredestroyed or severally damaged, or to relocate out of state. Theborrower can sell the home to the state for 60% of its pre-stormvalue, minus insurance proceeds and other federal disaster repairfunds. If the borrower decides to sell, the lender may be asked towrite-off a portion of the debt. To participate in the program,homeowners must have at least $5,300 of uninsured damages fromhurricanes Katrina or Rita.