Feds Nix Road Home Relief; State on Hook for $522M

NEW ORLEANS (AP) — New Orleans must return hundreds of millions of dollars paid in home elevation grants after Hurricane Katrina, the U.S. Department of Housing and Urban Development says.

         The department wants names of nearly 18,000 homeowners who never raised their homes after getting the Road Home elevation grants, Robert McClendon with The Times-Picayune reported. It quoted a letter sent Oct. 1 asking how much total grant money those people got, saying the agency will review Louisiana's response and "identify repayment plan terms."

         The grants in question totaled $522.2 million, according to state officials.

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         The Louisiana Office of Community Development, which manages the Road Home program, does not have any immediate plans to renew its effort to make the homeowners pay back the grants, a spokesman said. 

         Office director Pat Forbes said he hopes Louisiana's congressional delegation will intervene.

         "We hope that Sen. Vitter, Sen. Landrieu and the rest of the delegation will work with these federal partners on a solution, so that we can close out the Road Home program in way that makes sense for our citizens nearly 10 years after hurricanes Katrina and Rita," he said in a statement.

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         The $9 billion Road Home program gave grants to fix homes to about 130,000 southeast Louisiana residents, but some grants didn't cover all repairs, other recipients used part of the money to cover delinquent mortgages and others were cheated by contractors. Thousands finished their repairs with money meant to help elevate the houses out of danger from future floods.

         HUD agreed last year to let homeowners who did that keep the elevation money if they could provide contracts and receipts for the repairs.

         About 1,200 people applied for amnesty but only about 15 had the required paperwork.

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         State officials asked HUD to let homeowners who could show that they are back in repaired homes swear under oath that they had spent the grants to fix their houses.

         The agency refused.

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