PRESS RELEASE
Today, the Restore Louisiana Homeowner Assistance Program announced that the first round of checks will be issued on Monday, July 8, to some homeowners impacted by the long-awaited, June 14 guidance issued by the U.S. Department of Housing and Urban Development (HUD) regarding how Small Business Administration (SBA) loans should be considered in Duplication of Benefits (DOB) calculations for federal disaster grant dollars.
This first disbursement of grant funds will go to approcimately 230 homeowners who were approved for an SBA loan, but declined or canceled the loan in its entirety and have already accepted and executed their grant agreement with the Program. Additionally, about 800 homeowners who declined or canceled their approved SBA loan in its entirety and received a grant determination, but have not executed their grant agreement, will receive notice of their increased award, adjusted to remove the entire SBA loan amount from their DOB calculation; the Program will work with these homeowners to finalize their updated grant agreements.
"Since the guidance was published a few weeks ago, we have been working with HUD to ensure the quickest possible delivery of funds to those homeowners who have been waiting so long for this assistance," said Pat Forbes, Executive Director of the Louisiana Office of Community Development. "While I am proud of our work to expedite delivery of these critical recovery dollars to the flood-impacted homeowners who should have never been further victimized by this federal penalty in the first place, we understand that this process can never move fast enough. We are continuing to do everything we can to work with HUD and speed up the release of funds for more homeowners."
For homeowners who drew down at least some of the SBA loan amount they were approved for, HUD's guidance stipulates that the State of Louisiana must submit a substantial Action Plan Amendment (APA) to HUD for approval before Restore Louisiana can begin providing funds for repayment of SBA loan funds disbursed to homeowners. The Office of Community Development (OCD) is writing the required APA based on the recent HUD guidance and plans to publish it within a week.
Once the APA is approved, which is estimated to take up to three months, the Program expects to be able to provide funds for repayment of the drawn down amounts of SBA loans for all households at or below 120 percent AMI.
For those households with income above 120 percent AMI, HUD's guidance requires that they demonstrate a "hardship" to be eligible for the reimbursement portion. In addition, HUD's guidance stipulates that the Program must ensure that at least 55 percent of all grant funds go to the benefit of low to moderate income (LMI) households. This federal requirement may result in only partial reimbursements of SBA loan funds that were drawn down for those households with income above 120 percent of AMI.
In the coming weeks, Restore Louisiana will send a survey to homeowners that will assist OCD in developing a broad and inclusive set of criteria for the hardship exception. The criteria for a hardship exception must be approved by HUD as part of the APA. HUD must then approve homeowners' financial hardship justification on a case-by-case basis.
