Thousands race to beat deadline for hurricane recovery grant

By Melinda Deslatte and Michael Kunzelman

NEW ORLEANS (AP) _ Bessie Griffin needs a government grant to rebuild the home Hurricane Katrina wrecked, but procrastinating may have cost her dearly.Griffin had vowed to be the first on her block to rebuild when she returned to New Orleans after the Aug. 29, 2005, storm. Her enthusiasm gave way to crippling despair, however, after she gave $10,000 to an unscrupulous contractor who left town without working on her home.

Griffin, 59, beat Tuesday’s deadline to apply for federally funded, state-administered grants of up to $150,000, but she has heard reports that the state’s Road Home program could go broke before thousands of applicants get their money.

“If the government doesn’t give me any assistance, then I guess I’m going to have to go overextend myself and take out a loan,” Griffin said as she waited Friday to meet with Road Home representatives.

Road Home applications were pouring in as Tuesday’s deadline approached, peaking at 1,600 applications one day earlier this month. Whether any money is left for last-minute applicants remains to be seen.

Road Home is awash in red ink, pledging more money to homeowners than the program can pay. The homeowner assistance program is funded with $6.4 billion in federal recovery money, but it faces an estimated $5 billion shortfall in what would be needed to help all eligible applicants.

That’s why state officials set an application deadline for what once was an open-ended program. They want a tally of how many people are eligible so they know how much money to seek from Congress to fill the gap.

Meanwhile, they’re also working on a plan to reshuffle federal recovery aid and use state surplus dollars to raise $1 billion, a plan that still needs approval from state lawmakers and federal officials.

Andy Kopplin, executive director of Gov. Kathleen Blanco’s Louisiana Recovery Authority, said the program is awarding about 10,000 grants a month _ to the tune of about $750 million.

“A billion dollars buys another five or six weeks of closings,” Kopplin said of the new infusion of cash, which is expected to be approved.

Even with the $1 billion boost, LRA estimates the program will run out of money by mid-December without additional cash. LRA estimates 49,000 eligible homeowners wouldn’t receive grants if Congress doesn’t provide extra funding.

More than $2.5 billion in grants have been handed out to more than 38,800 homeowners. Another $5.1 billion in benefits have been calculated for 72,500 additional applicants, exceeding the dollars on hand even with the $1 billion bailout.

To fill the gap, Blanco is looking to Washington. Now that the state has committed some of its own money to a Road Home bailout, Louisiana officials hope to get more for the program in an Iraq war spending bill expected to come before Congress in September or October.

While congressional leaders have expressed support for a Road Home bailout, the White House has been less committal. Donald Powell, President Bush’s Gulf Coast recovery chief, hasn’t indicated whether the White House would back more aid for the program.

Powell and Louisiana officials offer conflicting explanations for the Road Home shortfall. Blanco and LRA officials blame inaccurate damage estimates by the federal government. Powell has said the state included more people in the program than federal officials agreed to fund.

State and federal officials are discussing the shortfall, but Powell is seeking more information before he takes a stance on a bailout.

“We look forward to further conversations and a discussion of the facts and analysis,” said Evan McLaughlin, a spokesman with the federal Office of Gulf Coast Rebuilding.

State officials say it will take weeks to sift through the applications and determine how many are eligible _ and how much money the program truly will cost.

As Tuesday’s deadline approached, several dozen property owners gathered at First Pilgrim Baptist Church in New Orleans to fill out Road Home applications or press officials for answers about pending applications.

Joe Cox, 41, and his wife, Tara Cox, 37, applied for a Road Home grant several months ago and are still waiting to hear if they are eligible for any money.

“We’re not holding out much hope,” Tara Cox said.

That didn’t stop the couple from slowly rebuilding on their own, without Road Home’s assistance.

“It’s a matter of adjusting expectations,” Joe Cox said. “We didn’t expect anything from it.”


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