Fed Plan Earmarks Another $4B for Louisiana

The state's allocation will target Orleans, St. Bernard and Jefferson parishes, but isn't limited to those areas. Once the funds are on their way to Louisiana, they'll be used to cover the gap between the cost of rebuilding and Federal Emergency Management Association grants and insurance payouts.

The grant has several goals, including assurance that mortgage banks receive payments that might have been interrupted because homeowners and others couldn't afford to pay and reconstruction. "We want to see the money to go to rebuilding," says Francis Creighton, director of government affairs for the Mortgage Bankers Association of Washington, DC.

Even better news for those in Louisiana is the process can start almost immediately because groundwork and legwork about the manner of distribution has been completed. A $1-billion grant was issued to Louisiana through the Department of Defense Appropriations Act on Dec. 30, 2005. With that money, Louisiana state and local officials, along with the Louisiana Recovery Authority created "the Road Home," a comprehensive plan outlining method for disbursing funds to approved applicants.

Creighton says the disbursal method from the new legislation will depend on the number of applicants. "The entire $4.2 billion probably won't end up going to individual homeowners," he speculates to GlobeSt.com. "The money left over will be directed toward multifamily housing, replacement of public housing and overall community development."

Creighton also believes the president will sign the emergency spending bill into law quickly because it's tied to military spending. Following that, Louisiana applicants could begin seeing the grants as early as the end of summer. "First the people need the money," he says. "Second, similar funds are going out to people further along on I-10 in Mississippi. That'll create a lot of pressure to make sure the money gets out to Louisiana people as soon as possible."