Trump administration agrees to fix ‘duplication of benefits’ trap for Louisiana flood victims

May 02-- May 2--WASHINGTON -- Thousands of Louisiana homeowners who have been stuck in the "duplication of benefits" trap following the historic floods of 2016 will now be eligible to seek federally-funded grants, after intense lobbying from the state's congressional delegation.

The Louisiana Congressional delegation announced Thursday that people who were previously blocked from Restore Louisiana benefits because they applied for Small Business Administration loans will officially be able tap into the program.

U.S. Sen. Bill Cassidy, R-Baton Rouge, and Sen. John Kennedy, R-Madisonville, have spent several months meeting with Housing and Urban Development Secretary Ben Carson and other Trump administration officials trying to break through a log-jam that had stopped an Oct. 2018 law meant to address the issue from taking effect.

"Rules will be released in days, but I have received assurances from Secretary Carson that if you took out an SBA loan you will be eligible to receive a Restore Louisiana grant and have the resources you need to recover," Cassidy said Thursday. "We had thousands of people in Louisiana after the great flood of 2016 who were punished for being responsible and doing the right thing--that's wrong."

Louisiana received more than $1.7 billion from Congress for 2016 flood relief. About $1.3 billion was designated for homeowner rebuilding assistance, but a federal rule initially prevented those who received SBA loans from reaping the full benefits of the program.

Louisiana's congressional delegation, spearheaded by U.S. Rep. Garret Graves, a Republican whose Baton Rouge-based district was heavily affected by the floods, pushed to eliminate that rule.

Graves said that he's frustrated it has taken so long for HUD to move forward.

"This is a perfect example of why people really hate the bureaucracy of the federal government," he said. "There is no good excuse for these sorts of delays."

He said flood recovery has consistently been at the top of issues his constituents voice to him.

"The number of people who just have these devastating personal stories," Graves said. "This is really personal to a lot of people and meaning awful consequences for them."

In recent months, Cassidy and Kennedy resorted to a procedural move to try to get the federal government's attention to the issue by holding up the Trump administration's HUD nominees, promising only to lift the hold once HUD acted on the "duplication of benefits" issue.

Kennedy brought the issue directly to President Donald Trump in early April during a private lunch meeting. He wouldn't say at the time where Trump stood on the issue, but strongly hinted that the president could be willing to intervene on Louisiana's behalf.

On Thursday, Kennedy credited the president's intervention for ultimately succeeding in addressing the problem.

"(Trump) told me that he would resolve this, and he did," Kennedy said. "Duplication of benefits was a huge hurdle for many families as they struggled to rebuild. Louisianans are resilient, but they'll be made even stronger by getting the disaster relief they were promised."

It's unclear when homeowners will be able to access the funds. According to Cassidy's office, more details will appear in guidelines that HUD will issue.

Gov. John Bel Edwards, a Democrat, said his administration, through the Restore Louisiana program, will immediately begin updating grant awards, contacting homeowners and distributing funds as soon as official guidance is received from HUD.

"This is a momentous announcement for thousands of Restore Louisiana applicants who have been waiting since the aftermath of the 2016 floods for a fix to the previous federal policy," Edwards said. "I want to sincerely thank President Trump, his administration, and our congressional delegation for their partnership and hard-fought efforts to enable the release of these funds and bring about real, positive results for homeowners working to recover from the 2016 floods."

Like with other HUD programs meant to benefit low- to middle-income households, program priority will go to families who make below 120 percent of the area-median-income. Those who make more than that will be able to apply for exemptions.

According to Cassidy, Carson confirmed that grants can be used to pay off SBA loans.

As in previous disasters, affected homeowners who sought SBA loans have been unable to tap into grant dollars that duplicated whatever loan amount they were deemed eligible to receive -- even if they never accepted the loan money.

For example, a homeowner with an estimated $25,000 in damage who qualified for a $20,000 SBA loan would be eligible for only $5,000 in grant money that wouldn't have to be repaid. Meanwhile, a homeowner who took on the same value of damage -- $25,000 -- but didn't apply for an SBA loan could potentially receive for the full $25,000 grant if all other qualifications were met. In many cases, SBA loan awards were larger than the value of total damage, leaving homeowners without an opportunity for any grant assistance.

Check back with The Advocate for more details.

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