BATON ROUGE, La. (WAFB) - Restore Louisiana has now released a statement following the U.S. Department of Housing and Urban Development’s (HUD) duplication of benefits guidance for 2016 flood victims.
HUD released the long-awaited guidance regarding Small Business Association (SBA) loans being considered a duplication of benefits for federal grant money available through Restore LA on Friday, June 14. Restore LA says the Office of Community Development (OCD) is currently working with HUD to fully understand the guidance, which should go into effect once published as a notice in the Federal Register.
Restore says OCD has starting writing the Action Plan Amendment (APA) required by HUD, and modifying its program policies in order to implement HUD’s guidance. Once HUD provides clarification on federal requirements and limitations, Restore will contact affected flood victims with more information about their specific accounts, as well as any additional documentation that might be required.
“The good news is that Restore Louisiana may be able to soon move forward with processing reductions in DOB in cases where homeowners declined the SBA loan amount they were approved for, regardless of income,” said OCD Executive Director Pat Forbes. “Because the program has been preparing for this for months, and we do not believe an APA is necessary for this portion of the guidance, homeowners who outright declined their SBA loan may expect to receive notification from the Restore Louisiana program in the coming weeks.”
The guidance from HUD includes numerous stipulations about how Restore LA can update the grant duplication of benefits calculation, depending on whether the homeowner declined, canceled, or drew down in whole or part SBA loan money. The guidance also takes into account whether the homeowner’s total household income is below or above 120% of the Area Median Income (AMI). This federal metric defines the midpoint of a region’s income distribution, while also considering each homeowner’s parish and household size.
Restore LA says it continues to work with Louisiana’s Congressional delegates to get more clarification from HUD. Below is Restore’s current understanding of the guidance:
- For homeowners who declined or canceled the SBA loans they were approved for, the SBA loan amount they did not draw down will no longer be counted as a duplication of benefits for their Restore grant, regardless of income
- The state must submit a substantial APA to HUD to be able to provide funds for repayment of SBA loan funds disbursed to homeowners. Once that action plan amendment is approved, the program will be able to provide funds for repayment of the drawn down amounts of SBA loans for all households at or below 120% AMI.
- Households with income above 120% AMI may also be able to receive funds for SBA loan repayment if they can demonstrate a “hardship.” The criteria for a hardship exception must be approved by HUD as part of the substantial action plan amendment. HUD will then need to approve homeowners’ financial hardship justification on a case-by-case basis.
To ensure families with lower to moderate income receive assistance, those who make below 120% of the AMI will be immediately eligible for the Restore Louisiana grants. Those making above 120% AMI will be able to apply for an exemption to receive the grants.
Figures for 120% of AMI for parishes in the area affected by flooding are below: