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1.5.2.3 State Assistance for Homeowners in Natural Disaster Areas

After past disasters, states have used HUD funds to develop new programs to aid victims. Immediately after Hurricanes Harvey and Irma, HUD announced that it had redirected resources to the impacted regions.115 It is likely that affected states will develop specific grant and aid programs targeted at this population.116

After Hurricanes Katrina and Rita in 2005, the state of Louisiana used federal Community Development Block Grant (CDBG) disaster funds to assist affected homeowners. Under the state’s plan, eligible homeowners received a one-time grant payment of up to $150,000 for damage to the home not covered by property insurance, FEMA grants, or other federal, state, or local government programs. In exchange, homeowners were required to agree to covenants and restrictions running with and encumbering the property. The covenants include requirements that the property be rebuilt and repaired according to housing codes and ordinances, as well as requirements regarding the elevation of the building in compliance with FEMA standards and homeowner occupation of the property for three years.117

Mississippi had a similar program. The state used CDBG funds to assist homeowners whose primary residence suffered flood damage as a result of Hurricane Katrina. The Mississippi Development Authority permitted lenders to reduce the amount homeowners received by any past-due installments on the mortgage or taxes owed.118

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