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Katrina Survivors Required to Repay Rebuilding Money

In another blow to Hurricane Katrina survivors who've struggled to rebuild their lives, some are receiving crushing phone calls — they may have to refund thousands of dollars of grant money they received to rebuild. Apparently in the rush to get aid to homeowners in need, over-payments were rampant.


The contractor who was hired to distribute payments from the Road Home grant program has just uncovered 1,000 to 5,000 cases that it says will require collection effort. How much? The average amount to be collected is estimated to be about $35,000, and in some cases it may be as high as $100,000 to $150,000.

As that's the biggest grant amount allowed by the Road Home program it's clear that some applicants received the maximum when they didn't qualify for a penny. But the trouble isn't limited to over-payments. To find out, read more.

About a third of qualified applicants for Road Home grants had yet to receive any rebuilding money as of this past week. The picture above is from the second anniversary of Hurricane Katrina. Two years later the people in the picture are still living in their formaldehyde-contaminated FEMA trailer behind their house. With that in mind it seems this statement from the executive director of the Louisiana Recovery Authority about over-payments seems unbelievable: ''The state must walk a fine line of treating homeowners who have been overpaid with fairness and compassion and ensuring that all federal funds are used for their intended purpose.''

Is it clear yet that we've utterly failed the residents of New Orleans? What in the world can we do to fix this?

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