Homeowners Assistance Program Finishing a Year Ahead of
Projections From: Mississippi Development Authority Filed 2/2/09 GCN JACKSON, Miss. – With more than 26,900 grants awarded, the Mississippi Development Authority (MDA) Disaster Recovery Division estimates all Homeowners Assistance Program (HAP) awards will be completed within the first quarter of 2009, about a year ahead of projections. “This program is basically done, with our private HAP contractor, Reznick, having already been relieved of its contractual obligations a year ahead of the company’s previous completion estimate,” Jon Mabry, Chief Operations Officer of MDA’s Disaster Recovery Division said. “We only have about 200 of the more complex cases left to process, all of which MDA staff can finish within weeks.” The Homeowners Assistance Program marked a unique application of federal dollars from the Department of Housing and Urban Development (HUD) Community Development Block Grant Program (CDBG). Though normally only available to local governmental entities for infrastructure related projects, the HAP program empowered individual Hurricane Katrina victims to receive CDBG-sourced grant assistance to compensate for uninsured losses. HAP grants of up to $150,000 were made available to Coastal Mississippians whose homes were either damaged or destroyed by Hurricane Katrina’s unprecedented storm surge. Application intake lasted almost two years. Applicants were received until March, 2008 at three MDA HAP service centers along the Coast, as well as a rolling service center. “Certainly we had some bumps because this program was the first of its kind, but overall HAP has been very successful,” Mabry continued. “Almost 96 percent of grantees have rebuilt or plan to rebuild their homes, restoring significant housing stock in the three Coastal counties and contributing to the region’s overall economic recovery.” HAP fraud cases and award mistakes were low in relation to almost 27,000 HAP applications funded. Only 58 out of 300 suspected fraud instances are confirmed by the State Auditor, who investigates all suspected HAP fraud cases. Errors in grant awards resulting from inaccurate application information or errors in processing were also minimal. Out of the more than 27,000, only 294 households were overpaid. Thus includes 176 awarded in error due to inaccurate FEMA data; another 41 from errors in damage assessments; and 77 resulting from either applicant or contractor processing errors. Pursuant to federal law, MDA has initiated recollection efforts in each case. Through its regular auditing and accountability practices, MDA Disaster Recovery Division recovered more than $26 million in HAP program expenses, including $5 million in contractor overbilling; an $18 million savings resulting from a more stringent, shorter Reznick contract implemented last April which also resulted in the state gaining another $3.2 million due to penalties imposed upon the contractor. Roughly 80 HAP appeals cases remain before the independent HAP appeals board. MDA anticipates all appeals hearings will be finished this year. “The appeals process will go on as long as it takes to give each case a fair hearing,” Mabry concluded. “However, we anticipate this process also finishing within calendar year 2009.” The HAP program consisted of several components to assist homeowners with uncompensated losses. “Phase I” was created for homeowners outside the pre-Katrina flood zones who weren’t required to carry flood insurance, but who nevertheless suffered storm surge damage from Hurricane Katrina. A “Phase II” piece was created strictly for low and moderate income applicants, regardless of whether the applicant’s residence was in or outside the pre-Katrina federal flood zone. “In fact, more than 42 percent of the total 27,000 HAP grantees were below 80 percent of area median income (AMI),” Mabry added. This totals more than $750 million in Phase I and Phase II HAP grants to low and moderate income households in the three Coastal counties.” HAP also included supplemental Elevation Grants providing for HAP assistance to HAP recipients who’re now required to elevate their new home to more stringent post-Katrina federal flood standards. And, “Sold Home” or “Phase III” grants were available to those homeowners suffering uncompensated loss after having sold their Katrina-damaged primary residence at diminished values. Finally, an Elevation Certificate Policy for homeowners with surge damaged primary residences inside the pre-Katrina flood zone whose homes were elevated above federal standards was enacted, enabling those homeowners to receive HAP funding. “Though HAP grants were not intended to make every homeowner whole, these grants have been very helpful to homeowners who otherwise could not have offset their uncompensated losses and rebuilt their homes,” Mabry concluded. “Distributing $2 billion in federal grants directly to almost 27,000 homeowners --- 96 percent of whom are rebuilding--- has unquestionably helped speed Mississippi’s Hurricane Katrina recovery.” HAP Facts Phases I, II, III and Elevation Phase I - $1,534,916,303 ● 18,458 individual grants paid totaling $1.412 billion Phase II - $604,601,697 ● 8,462 individual grants paid totaling $419 million *Total Phase I and II combined awards to low and mod income: 42 percent (less than 80 AMI) *Fraud cases: 300 suspected, 58 confirmed; *Calculation errors: 294 cases, recollection initiated Phase III “Sold Home” (Plan modification for those applicants who had sold homes) ● $21 M disbursed to date to over 500 applicants Elevation Grants Phases I and II - $70,500,000 ● 2,211 active applications in process ● 1,991 grants approved to date valuing $59.7 million ● Elevation Certificate modification: 1,518 grants paid totaling $113.7 million More Information: Federal Prosecutors in Mississippi Report Over 160 Guilty Pleas in Cases of Katrina Fraud - GCN
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