State officials are ending their litigation against thousands of Louisiana homeowners who failed to comply with the terms of grants awarded after Hurricane Katrina to protect their damaged homes from future flooding.
Louisiana Rep. Troy Carter, U.S. Housing and Urban Development Secretary Marcia Fudge, Gov. John Bel Edwards and New Orleans Mayor LaToya Cantrell announced the decision to drop the lawsuits Feb. 16 in New Orleans. The announcement brings to a close the state’s RoadHome Program, under which tens of thousands of Louisianans struggling with housing issues after the 2005 hurricane received more than $9 billion.
HUD allocated the funds, but the state administered the program. HUD rules called for homeowners to use funds to raise their homes to make them better able to withstand floods, but the Louisiana Record learned that often the grants were insufficient to elevate homes, and many homeowners were told by contractors that the money could be used for other repairs.
A HUD audit uncovered how millions of dollars in funds were used for repairs not covered by the terms of the grants, and state officials then sought to recover misspent funds from homeowners, who were often low-income residents or senior citizens, the Record learned.
Under the agreement, the state, which currently has surplus funds, will pay back the remaining misspent funds to the federal government.
“For many low-income homeowners, the (lawsuits) meant possible financial ruin and fear that their homes would be taken away,” Carter said in a prepared statement. “Today, all that stops. … There will be no further payments required from impacted homeowners. The state will take final actions to close the RoadHome Program and will repay the amount associated with non-compliance.”
The RoadHome program was the largest federal program ever launched to provide housing disaster assistance, officials said. Defendants in the lawsuits were generally seen not as bad-faith actors but hurricane victims who were given less-than-accurate information about the terms of the grants.