Louisiana Flood Victims Still Waiting for Federal Recovery Grants

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The month-long partial federal government shutdown likely further delayed aid grants to homeowners still trying to recover from the 2016 flooding, Louisiana’s top disaster recovery official said.

As many as 6,000 Louisiana residents who took out loans from the U.S. Small Business Administration after the March and August 2016 floods have been waiting to see if federal rules might change so they could access Restore Louisiana recovery grants.

Congress changed the law in October to allow SBA loan applicants to not have those count against the federally financed grants. But The Advocate reports state officials are waiting for the U.S. Department of Housing and Urban Development to issue new legal guidance.

Pat Forbes, the leader of Louisiana’s flood recovery effort, said HUD guidance that was expected in March could be delayed another month due to the shutdown.

“The 35 days of shutdown probably adds at least 35 days to that timeline because those were days people were going to be writing this guidance,” Forbes, director of the Louisiana Office of Community Development, told the Restore Louisiana Task Force on Friday.

HUD spokesman Brian Sullivan said the agency, which saw 97 percent of its workforce furloughed during the shutdown, still hopes to issue its new SBA loan rules done within the first quarter of the year. He said the agency has been “gigantically busy” working on recovery plans for other recent disasters.

Sullivan said he couldn’t comment on whether HUD will give Louisiana the go-ahead to cut checks to pay off SBA disaster loans. But the spokesman did note that Congress’ law change, which was written by Republican U.S. Rep. Garret Graves, “says SBA loans can never be considered a duplication of benefits.”

Graves said the law change is clear. He said the holdup is the frustrating result of a slow-moving bureaucracy that’s kept affected Louisiana homeowners in limbo too long. He said he was scheduled to speak Monday with HUD Secretary Ben Carson about the issue.

“I’ve spoken to attorneys from four different federal agencies that are all involved in this debacle that all agree the law fixes this problem,” Graves said.

Republican U.S. Sen. Bill Cassidy said in a statement that “regardless of the shutdown, HUD’s delay is simply unacceptable.”

Though the SBA issue remains outstanding, Restore Louisiana has otherwise nearly completed its homeowner grant-making process related to the 2016 floods. About 16,000 people have been offered $561 million in assistance.

Forbes said the state is holding enough money in its homeowner assistance program to accommodate a reading of the federal law that would allow the state to distribute the maximum amount of money to SBA loan holders, about $225 million.

But there will be money left over, because the homeowner assistance program drew fewer successful applicants than state officials anticipated. The task force has agreed to redistribute some of the money to other aid programs for landlords, housing developers and farmers.