Gov. Edwards tells Restore Louisiana to reopen flood disaster applications

Sept. 25--The state wasted little time reopening a disaster assistance program on Monday after a congressional compromise over the weekend lifted the "duplication of benefits" ban that had prevented households impacted by the 2016 floods from receiving both loan money and rebuilding grants.

The U.S. Senate and House of Representatives are expected to vote on the duplication deal, which was tacked onto an unrelated aviation funding bill, sometime this week. If approved, the legislation then would need to be signed by the president.

But Gov. John Bel Edwards is confident enough of passage that he instructed the state Office of Community Development to immediately reopen the application process to the Restore Louisiana Homeowner Assistance Program until Oct. 19 and extend the deadline until Nov. 16. The application survey had been shut down July 20 and the application deadline had been set for Oct. 1.

"Given the pending agreement reached in Congress, we want to give homeowners more time to complete the program survey and application to provide as many flood survivors with the assistance that should have been available to them from day one," Edwards said in prepared statement.

About 6,000 households in 51 parishes found themselves in the duplication dilemma when they, as instructed when applying for assistance, filed for low-interest U.S. Small Business Administration loans to rebuild after the March 2016 floods in north Louisiana and the August 2016 floods in south Louisiana. They then learned that the federal Stafford Act, which regulates disaster recovery programs, forbid loan recipients from receiving federal grants to help rebuilding on the theory the property owners were being paid twice for the same event.

"The tragedy of the thing is they (Federal Emergency Management Agency assistants) told everybody that they had to apply for an SBA loan in order to qualify for FEMA assistance," said Pat Forbes, who as director of the Office of Community Development that oversees the state's storm restoration efforts.

Restore Louisiana, which handles the money, were required to discount recovery grants by the amount of the SBA loan. The congressional compromise would allow Restore Louisiana to pay the grants in full.

"Essentially, we would recalculate (the property owner's) grant and no longer count SBA loan as a duplication. That means the SBA loan won't get subtracted from the grant amount," Forbes said.

Say Restore Louisiana appraisers calculated $100,000 in damage, Forbes said by way of illustration. And the property owner's private insurance paid $50,000 and the SBA loan covered another $50,000.

The state was forbidden by the federal Duplication of Benefits ban to approve the property owner from receiving any disaster recovery dollars, which usually comes from U.S. Department of Housing and Urban Development's Community Development Block Grant Disaster Recovery program.

Even if the property owners were approved for a SBA loan but chose not to use the money -- as many did because they couldn't afford the repayments -- they still were unable to collect the recovery funds under this scenario, he said.

Under the bipartisan compromise agreed to over the weekend, Restore Louisiana can now grant the additional $50,000, Forbes said.

The legislation, if signed into law, would open up about $215 million in federal grants for flood victims.

The money can be used to repay the SBA loans, reimburse earlier expenses or continue rebuilding, he said. The amount available will be based appraisers' calculations of damages caused by flooding, which is connected to Restore Louisiana application process.

Those who already have applied to Restore Louisiana and were denied benefits won't have to go through the eligibility requirements and damage assessments again, Forbes said.

The state has a handle on how many households received SBA authorization that cost them grant money, he said. But many -- perhaps hundreds -- knew they couldn't receive any additional disaster funds and didn't bother to file with Restore Louisiana. Forbes is hoping those property owners will begin the process by taking the Louisiana Restore survey.

The initial survey, which takes about 15 minutes, helps determine if the flood-impacted homeowner meets eligibility standards. If so, the property-owner then will fill out an application, which triggers the appraisal.

Edwards and the Louisiana delegation worked for almost two years to change the language. If approved by both congressional chambers and signed by the president, HUD would then have to come up with rules and procedures, which could take a few months.

"We want to have everything in place for when the guidance is ready, we can start issuing grants" without further delay," Forbes said.

The survey is accessible online at restore.la.gov or by calling 1-866-735-2001 from 8 a.m. to 6 p.m. Monday through Friday. Additionally, homeowners may visit one of the program's four Housing Assistance Centers in Baton Rouge, Hammond, Lafayette and Monroe, all of which are open from 8 a.m. to 5 p.m. Monday through Friday.

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