HUD Announces Agreement with State of Louisiana to Resolve Repayment Obligations for 3,300 Homeowners Impacted by Hurricane Katrina

Road Home program, Rita

HUD announced on February 16 that the agency had reached an agreement with the State of Louisiana to cease repayment actions for over 3,300 disaster-impacted homeowners enrolled in the post-Katrina Road Home Program. Under the agreement, these homeowners will have their outstanding debt wiped clean and will be able to live free of Road Home-related debt.

In the immediate aftermath of Hurricanes Katrina and Rita, Louisiana’s HUD-funded Road Home Program provided funds for house repair and mitigation efforts. The program provided funds to elevate more than 13,000 homes, provide additional mitigation measures for more than 39,000 homeowners, and provide new housing for more than 8,500 families. For some Katrina and Rita survivors, the funds provided via the program were not sufficient to fully complete construction or relocation work. Not having enough money to fully complete elevation or mitigation projects, many of the families used program funds for basic repair work on their storm damaged homes. In 2010, the HUD Inspector General found that the use of additional funding sources violated HUD policy. In response, the state began efforts to recover those funds from the households in question. As of this year, 700 homeowners had court judgments against them, 231 were subjected to repayment plans, and 2,365 homeowners were in active litigation about their debts. These households owed an average of $46,000 each. Under the new agreement, all debts related to this issue will be cleared.

“For more than 17 years, many Louisianans have not had the freedom to fully move on from the pain and trauma of Hurricanes Katrina and Rita – that changes today,” said HUD Secretary Marcia L. Fudge in a press release announcing the change. “I have made it a priority to clear the cloud of debt that has impacted too many families and individuals. This action is about providing peace of mind and freedom. Louisianans have shown their resiliency and strength time and time again over the past years, and now they will feel the relief from this burden.”

Read the press release announcing the agreement at: