$846 million of Katrina aid unclaimed

Mom-and-pop financing
"A lot of times you look at a property owner as someone with the financial record," needed to qualify for a loan he said. "The small mom and pops didn't have the same finance ability as was thought."

State records show the Small Rental Property Program did not issue a single rebuilding grant in its first year.

Like the larger Road Home program, the rental effort is run by Fairfax, Va., contractor ICF International, and overseen by the Louisiana Recovery Authority, the state's hurricane rebuilding arm.

ICF spokeswoman Gentry Brann referred inquiries to the LRA, where spokeswoman Christina Stephens said the program suffered from a computer system that limited caseworkers' ability to update and examine files.

"They were building the ship while you sailed it," Stephens said. "They were developing software as the program moved forward."

Still, the Road Home Web site optimistically states: "the Rental program has nearly $594 million in outstanding conditional awards, which will produce 12,792 units, including 10,951 affordable rental units in a total of 6,835 rental properties."

Sweazy and Stephens said the numbers reflect commitment letters, not aid actually given to landlords.

The most direct measure of the program's impact is the number of grants issued, found in monthly progress reports by the state. That number was 352 in the most recent report at the beginning of November, accounting for about $23 million in the hands of Katrina victims. That leaves $846 million of the $869 million allocated to the rental program in traction.

What to do with $846 million?
Ideas abound for what to do with that money.

The state is now trying to divert about $115 million into programs for low-income, first-time homeowners. Sweazy said other possible uses include cutting out bank middlemen and giving money directly to landlords; a rent stabilization program; or having the government buy up the properties and sell them off to developers who commit to build affordable housing.

But the U.S. Department of Housing and Urban Development has strict guidelines for how the money can be used, including a requirement that 50 percent be spent on lower-income applicants, and one that prohibits a "duplication of benefits" with other recovery efforts, meaning Sweazy's idea of giving the money directly to landlords could face obstacles because it would mirror the upfront grants of the Road Home.

Critics also caution against creating another program that would take months to administer, while the gutted rentals contribute to blight across the city.

A spokesman for U.S. Department of Housing and Urban Development, which approves the funds to the state, said new programs must adhere to a federal requirement that 50 percent of the money be spent on lower-income applicants. They must also avoid a "duplication of benefits" with other recovery efforts, meaning Sweazy's idea of giving the money directly to landlords could face obstacles because it would mirror the upfront grants of the Road Home.

None of the proposals will help Marshall any time soon.

Her credit scores are too low to qualify for a loan that will cover the $180,000 in repairs contractors say her property needs.

So she lives in the restored front living room of her property in the spottily rebuilt Gentilly neighborhood. The rest of her owners' quarters and the apartments remain gutted from a storm that hit 39 long months ago.

"I'm in limbo, after all I put into buying this place," Marshall said.

"But I don't want to sell. This is my home."

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