New Orleans Homeowners Find The RoadHome

Register now

WASHINGTON - (06/01/06) -- Housing and Urban DevelopmentSecretary Alphonso Jackson traveled to New Orleans' French Quarterthis week to announce a bailout plan that will allow the state touse Community Development Block Grant funds to provide up to$150,000 to uninsured homeowners to repair homes badly damaged ordestroyed by hurricanes Katrina and Rita. The 'Road Home Program'will be as much of a bailout for credit unions, banks and othermortgage lenders, which hold the mortgages on all of the damagedproperties. So far, Congress has appropriated $4.2 billion of theestimated $8.8 billion required to fund the program, meaninglawmakers will be asked as part of an emergency funding bill toprovide the remaining $4.6 billion needed. Under the program, thefunds, minus insurance settlements and other grants, will go tohomeowners whose primary residences were destroyed or severallydamaged, or to relocate out of state. The borrower can sell thehome to the state for 60% of its pre-storm value, minus insuranceproceeds and other federal disaster repair funds. If the borrowerdecides to sell, the lender may be asked to write-off a portion ofthe debt. To participate in the program, homeowners must have atleast $5,300 of uninsured damages from hurricanes Katrina orRita.

For reprint and licensing requests for this article, click here.