HUD approves $4.2 billion for Louisiana's 'Road Home' hurricane rebuilding program

NEW ORLEANS -- The federal government will pay $4.2 billion into a program to help Louisiana residents rebuild or sell houses severely damaged by hurricanes Katrina and Rita, officials said Tuesday.

The Department of Housing and Urban Development also announced it would provide $1 billion for hurricane-related housing needs in Mississippi, Texas, Alabama and Florida, and called on those states to apply for the additional money.

"For the first time we can guarantee that we have all the funding we need," said Gov. Kathleen Blanco. "We will bring back our communities devastated by both Katrina and Rita -- two pretty vicious hurricanes."

Louisiana's $4.2 billion will be added to federal allocations the state already had received to fully fund its more-than-$9 billion "Road Home" program for hurricane recovery. The program is designed to provide Louisiana residents up to $150,000 to rebuild or sell houses severely damaged by the storms, using grants to cover repair costs above what was covered by insurance policies and FEMA grants.

About 123,000 home owners and owners of about 80,000 apartments are eligible for the program, state officials have said. About 90,000 have already signed up, officials said.

Blanco has said that the Louisiana Recovery Authority, which oversees the program, expects eligible homeowners to begin getting checks by late summer.

Apartment shortages, combined with increasing insurance premiums for people who own buildings in areas hard-hit by Hurricane Katrina on Aug. 29 or Rita on Sept. 24, have also created hardships with rents rising 20 percent or more in many cases.

For people who sell their property and can demonstrate continued permanent residence in the state, the grants cover the difference between a home's pre-storm value and post-storm insurance settlements and FEMA grants.

Owners who take the "sell" option and have moved out of Louisiana state can only get 60 percent of their home's pre-storm value.