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HUD   >   Press Room   >   Press Releases   >   2011   >   HUDNo.11-138

HUD No. 11-138
Brian Sullivan
(202) 402-7527

FOR RELEASE
Wednesday
July 06, 2011

HUD AND LOUISIANA ANNOUNCE SETTLEMENT AGREEMENT
TO END LEGAL CHALLENGE TO ROAD HOME PROGRAM
Approximately 1,300 homeowners in four parishes to receive $62 million in additional compensation

WASHINGTON – Homeowners living in Cameron, Orleans, Plaquemines, and St. Bernard Parishes may be eligible for additional compensation under the Louisiana’s Road Home Program under the terms of a settlement agreement announced today by the U.S. Department of Housing and Urban Development (HUD), the State of Louisiana and plaintiffs in a federal housing discrimination lawsuit.  Read the full text of the agreement announced today.

HUD, Louisiana, the Greater New Orleans Fair Housing Action Center, National Fair Housing Alliance and others agreed to end a legal challenge to the State’s Road Home Program.  Under the terms of the agreement, Louisiana will award an estimated $62 million under its new Blight Reduction Grant Adjustment Program.  Additional assistance under this anti-blight effort will be awarded to an approximately 1,300 homeowners in those four parishes who received compensation under Option 1 of the State’s Road Home Program based upon the pre-storm value of their damaged homes, and as a result still have not been able to repair and re-occupy their homes. 

“This agreement is a huge help to families who clearly want to get back into in their homes but continue to struggle to make the needed repairs to their properties,” said HUD Secretary Shaun Donovan.  “While this additional compensation goes a long way to helping folks complete their recovery, we’re also going to make sure that those who left their blighted properties behind are held accountable.” 

Louisiana Commissioner of Administration Paul Rainwater said, “Our goal in Louisiana has always been to provide the resources necessary to allow residents impacted by Hurricanes Katrina and Rita to return home, regardless of race or status. We recognize that many households face remaining challenges in their rebuilding efforts and we are hopeful that additional assistance through our Blight Reduction Grant Adjustment and other rebuilding programs will help bring even more Louisiana families home. I am glad that we will be able to close this chapter of the Road Home and to move forward.”

“Regrettably, the Road Home program became a road block for many.” said James Perry, Executive Director of the Greater New Orleans Fair Housing Action Center.  “This settlement is a step in the right direction toward getting more hurricane-affected homeowners back into their homes and making good on America’s promise to build a better New Orleans in a way that is fair and equitable for all people regardless of their race.” 

Since Hurricane Katrina and Rita, HUD allocated more than $13.4 billion through the Community Development Block Grant (CDBG) Program to support the State’s long-term disaster recovery.  The Louisiana rebuilding plan, known as the Road Home Program offered up to $150,000 to families whose properties were damaged or destroyed and who committed to rebuilding their homes in Louisiana and reoccupying them within three years.  However, some families were unable to complete their repairs due to their relatively low Road Home Program grant award amounts and high construction costs. 

Nearly six years after Hurricane Katrina, Cameron, Orleans, Plaquemines, and St. Bernard Parishes continue to struggle with blight more than all other Hurricane Katrina or Rita damaged parishes.  The additional compensation provided through this supplemental Road Home grant amount will help mend neighborhoods and assist struggling homeowners to complete their repairs and reoccupy their homes. 

According to Louisiana’s plan, existing Road Home applicants must meet all of the following criteria to qualify for additional compensation under the BRGA: 

  • Must be a Road Home applicant who selected Option 1 and intends on repairing or rebuilding their damaged home;
  • The damaged home must have been in one of the four most impacted parishes (Orleans, St Bernard, Plaquemines or Cameron);
  • The applicant's original Road Home grant is significantly constrained by the Road Home determined Pre-Storm Value (PSV);
  • The PSV upon which the original grant is based was at or below the 55th percentile of the parish;
  • As of May 1, 2011, the homeowner has been unable to complete repairs and return to their damaged property or has returned without repairing the property and it is uninhabitable under the applicable codes and ordinances of the local jurisdiction; and
  • The homeowner agrees to participate in a construction advisory services program offered by the State to help guide the homeowners in the continued efforts to restore their lives. 

In October of 2009, HUD worked with the State of Louisiana to remove the $50,000 cap on ‘additional compensation grants’ for low- and moderate-income homeowners who applied for assistance under Option 1 of the Road Home Program.  To date, the State has disbursed  more than $470 million to lower income families, the majority of whom are minority households living in Orleans Parish.  Together with the BRGA, these two measures will provide more than a half billion dollars in rebuilding assistance to struggling storm damaged homeowners.

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