[StBernard] Revisions, Clarifications Proposed to Road Home Action Plan

[Westley Annis]

Revisions, Clarifications Proposed to Road Home Action Plan 

Changes Provide Greater Detail on Program's Implementation 


BATON ROUGE, La. - The Louisiana Recovery Authority (LRA) and the Office of Community Development (OCD) published an Action Plan amendment for public comment for The Road Home homeowner assistance program today that clarifies the model for assisting residents whose homes were damaged by hurricanes Katrina and Rita. The changes provide greater detail on how the Road Home program will be implemented and were negotiated between the LRA, the OCD, and the State's contractor, ICF International and officials from US Department of Housing and Urban Development (HUD). 

The action plan amendment also details agreements reached with Louisiana bankers and national lenders for the manner in which monies will be disbursed to homeowners as they repair or rebuild their homes. Homeowners, along with their lenders, will be able to manage their award through a joint account. 

"I am eager to forward this revised Action Plan amendment to HUD, where I have been assured of its approval," said Governor Kathleen Babineaux Blanco in a letter sent to legislators. "Then, the first awards from our pilot program can be made to deserving homeowners and the full scale launch of our program can commence." 

The central goals of The Road Home Housing Program include: 

*	Provide compensation to homeowners for losses related to Hurricane Katrina and Hurricane Rita;
*	Repair and rebuild quality housing in neighborhoods that are safe to live in;
*	Help restore pre-storm value to homeowners who want to return to Louisiana;
*	Provide affordable rental housing opportunities for displaced residents; and
*	Provide housing for the return of critical workforce.

Homeowners can elect the way they want to receive their assistance, whether as compensation for losses if they decide to keep their homes, or as payment for the sale of their homes to the State. 

"The revisions and clarifications announced today illustrate the kind of evolution we expected as this program moves from design to implementation," said LRA Housing Task Force Chairman Walter J. Leger, Jr. "These amendments will help us get homeowners the assistance they need to get back in their homes."

The program will require a homeowner sign a legal covenant that they will maintain owner occupancy of the home for at least three years. This covenant will also ensure the home meets local codes, is elevated if required by the Advisory Base Flood Elevations (ABFE), and is insured against floods and hazards. 

The Road Home program will aggressively monitor the compliance of homeowners with the legal requirements of their covenants. A homeowner's failure to comply will result in penalties, including the forfeiture of their entire grant award. 

"The state will not tolerate fraud or abuse in our recovery programs" said Virgil Robinson, the LRA's audit committee chairman. "Homeowners who fail to comply with their obligations under the covenants will be subject to prosecution and the forfeiture of their grant award."

The action plan amendment also outlines agreements reached with the banking industry for the manner in which residents will receive their aid. A homeowner should expect that the first mortgage lender, in exchange for the subordination of the mortgage lien, will ask that payments received by the homeowner be deposited in a two-party account. The homeowner and the first mortgage lender will be able to jointly manage the funds in the account. 

A homeowner without a mortgage who elects not to sell a home to the State will also sign the covenants to ensure that the program requirements are met. Payments may be made to these homeowners by the State in installments to ensure compliance with the covenants.

A homeowner may elect to use funds received to relocate to another home in the State, or to move outside of the State, but the payment provided will be less than the payment available if the owner elects to remain and reinvest in the State.

Consistent with the overall goals of the program, the calculation of assistance has been updated to be as generous as possible to all homeowners. Assistance will be based on current cost of repairs and replacement up to the home's pre-storm value. The amendment clarifies the definition of "damage" as the replacement or repair cost of the home. The basic formula for how compensation is calculated (replacement or repair cost less insurance payments not to exceed pre-storm value or $150,000) has not changed. 


It also specifies that the affordable loan is only available for homeowners with income less than 80 percent of the Area Median Income (AMI) and that it will be forgivable over a period of years as they maintain residence as an owner occupant.

The action plan amendment also explains the roles of the "Road Home Corporation" which the Legislature created during the regular session. It will take title to any properties that the state purchases through this program and be responsible for working with the LRA and local government to ensure that local planning guidance is followed as they release property back into commerce for redevelopment or purchase it for permanent green space. 

The LRA Board of Directors is scheduled to consider these amendments at their upcoming board meeting on Thursday, August 10, 2006.

If homeowners have not yet registered in The Road Home Housing Registry, they should visit http://www.louisianarebuilds.info/ <http://keelson.eatel.net/websites/la.gov/action.cfm?md=communication&task=addClick&msg_ID=2266&ID=d%5Fi%2Fe%2FiJn%60n%3A&redirect=http://www.louisianarebuilds.info/>  or call 1-888-Road-2-LA (1-888-762-3252) to register.

Hurricanes Katrina and Rita devastated South Louisiana, destroying more than 200,000 homes and 18,000 businesses. The Louisiana Recovery Authority (LRA) is the planning and coordinating body that was created in the aftermath of these storms by Governor Kathleen Babineaux Blanco to lead one of the most extensive rebuilding efforts in the world. The LRA is a 33-member body which is coordinating across jurisdictions, supporting community recovery and resurgence, ensuring integrity and effectiveness, and planning for the recovery and rebuilding of Louisiana.

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