Bill Aims at Speeding Gulf Recovery

Democratic Sens. Christopher J. Dodd (Conn.) and Mary L. Landrieu (La.) are co-sponsoring a comprehensive bill to speed up the recovery in the Gulf Coast that would allow Federal Housing Administration lenders to convey hurricane-damaged properties to HUD.Currently, the Department of Housing and Urban Development requires lenders to convey properties in habitable condition before they can be reimbursed for losses on an FHA single-family loan. But his policy has left damaged and empty residential properties scattered throughout the Gulf Coast, hindering redevelopment. Once HUD takes over ownership, the department can sell or transfer the properties to local governments or the private sector. The House has passed a similar FHA conveyance provision in its Gulf Coast housing recovery bill (H.R. 1227). The Senate bill also provides that Louisiana would have to put up $1 billion for its Road Home program before the federal government would cover any additional shortfall. The Road Home program, which provides grants of up to $150,000 to repair and rebuild homes damaged by hurricanes Katrina and Rita, has run into a $4 billion to $5 billion shortfall. The shortfall stems from the fact that the program covers wind and flood damage, not just flood damage as originally intended by Congress. In addition, 143,000 homeowners have qualified for grants -- 20,000 more than originally estimated.