[StBernard] Road Home Grants Begin

[Westley Annis]

Nearly a year after the storms, homeowners will begin collecting Road Home
grants of up to $150,000. Here's how it works:
Friday, August 04, 2006
By Gordon Russell
Staff writer 

Several hundred Louisiana homeowners have begun wending their way through
the state's $7.5 billion Road Home program, and officials from the company
hired to run it say they expect the state will award the first grants to
owners of devastated homes before the end of August. 

Not everyone will be so lucky, however. Mike Byrne, chief program executive
for ICF International, the company managing the process, estimates it will
take five to seven months to handle every applicant, meaning some Louisiana
homeowners might not sit down with a Road Home counselor until March. 

The long processing time is because of a couple of factors, chiefly the
number of applicants -- 100,000 thus far have preregistered -- and the
amount of time it takes to deal with each homeowner. Counselors working for
ICF will be asked not only to review sheaves of paperwork, but also to help
clients decide which of their options -- repairing, rebuilding or selling
their homes -- might best suit them, Byrne said. 

In a pilot program, which has handled 364 applications so far, many sessions
with homeowners have lasted two hours or more. 

"Our approach is that if you have, say, a succession issue, we try to help
you through it, instead of saying, 'Get this resolved and then come back,' "
Byrne said. "Everyone leaves with a plan -- if they're not already finished
by the time they leave." 

Company officials sketched out the mechanics of the program Thursday in more
detail than they have done before, though the program's complexity means it
will be difficult for many homeowners to determine how much money they might
be eligible for until they go through the process. 

ICF officials will begin reviewing applications to determine eligibility in
late August. Next, the company will send eligible homeowners a letter
explaining how to set up an appointment. 

Eventually, each homeowner will meet with a counselor, who will review his
or her case and help sort through the choices. 


Determining pre-Katrina value 

Award amounts will be determined in two basic ways, depending on each
homeowner's plans. Those planning to accept a buyout, or to rebuild from
scratch, will receive an award based on the home's pre-Katrina value minus
insurance proceeds. 

The home's pre-Katrina value will be calculated by comparing three values
and selecting the highest: the fair market value according to the assessor;
the value of the home as determined by a recent, pre-Katrina appraisal; and
a "broker price opinion" offered by an appraiser or real estate agent using
pre-Katrina square footage values. 

For those planning to renovate, ICF will send out field inspectors in much
the same fashion that insurance companies deploy adjusters. The inspectors
will measure, for instance, the number of linear feet of cabinets in the
kitchen, and each linear foot will command a certain amount of replacement
value, said Bob Santucci of ICF. 

Fred Tombar of ICF said the vast majority of those who have been through the
pilot program, which he is supervising, have found that the values for
various items set by the program are at least as high as the prices they've
been quoted by contractors. 

Santucci said the prices will include a 10 percent markup for overhead. In
New Orleans and some other parishes, the prices will be adjusted upward an
additional 8 percent to account for high labor and material costs. 

That said, Santucci said the program is not designed to allow for lavish
renovations. 

"It's enough to rebuild a modest house," he said. "If you had leather
floors, this won't cover it." 

Road Home counselors also will help residents find contractors and advise
them on how to avoid scams. 

ICF officials are calling the homeowner aid an "award" rather than a
"grant," mainly to correct misperceptions that the program simply hands out
money. The awards technically are a grant, however, as qualified homeowners
will not have to repay the money. 


But homeowners will not receive money directly from the Louisiana Recovery
Authority, which disburses the aid. 

If a home has an outstanding mortgage, the LRA will sign over repair money
jointly to the homeowner and the lender. If the loan has been paid off, the
money will go into a escrow account, and doled out to contractors as needed.



Buyouts favor reinvestment 

If a homeowner opts for a buyout rather than repairs, the money will be
deposited into an escrow account until the homeowner buys another home or a
lot to build a new house. The amount the homeowner gets will depend on if
the new home is in Louisiana; if it is not, the award will be cut by 30
percent. 

In cases where homeowners already have bought another house, the award will
be applied against their mortgage, said Anita Rechler, policy and plans
director for ICF. 

ICF is planning to open 10 housing assistance centers across the state by
late August, the biggest of them in New Orleans and Baton Rouge, Byrne said.
They'll be staffed by about 320 counselors. 

Down the road, plans call for opening a string of similar centers in
out-of-state evacuee hubs like Houston and Atlanta. 

As the company processes applications, one of its jobs will be to report to
the LRA the number of applicants and the size of a typical award. 

In lobbying for the federal aid, state officials said they believed as many
as 123,000 homeowners might be eligible for the program, which would work
out to an average grant of about $60,000. 

It's not clear what will happen if the numbers don't work out as planned.
Rechler noted that the figures were compiled by a "group of very smart
people" but said any decisions on how to tweak benefits would be up to
elected officials and the LRA. 

So far, fewer people have signed up than expected. And of the roughly
100,000 to preregister, Byrne said, a fair amount -- as much as 20 percent
-- could be ineligible for various reasons, leaving open the possibility
that there will be money left at the end. If that's the case, Byrne said,
Louisiana officials likely could redirect the money to another program. 

. . . . . . . 

Gordon Russell can be reached at grussell at timespicayune.com or (504)
826-3347.