|HUD No. 23-036
HUD Public Affairs
February 16, 2023
STATE OF LOUISIANA REACH AGREEMENT TO FREE 3,300 LOUISIANANS FROM ROAD HOME REPAYMENT OBLIGATIONS
State of Louisiana will stop legal action and release homeowners from repayment obligations under the Road Home program
Impacted homeowners who had judgements ruled against them will be relieved of an average $46,000 in debt
WASHINGTON - Today, the U.S. Department of Housing and Urban Development (HUD) Secretary Marcia L. Fudge traveled to New Orleans, Louisiana to announce that through a corrective action with the department, the State of Louisiana will forego legal actions and free 3,300 homeowners of their Road Home Program-related debt obligations. With the State’s compliance with HUD’s corrective action, the State will release unpaid judgments and payment plans against homeowners in April.
Through the agreement, Louisiana will be able to make good on the remaining Road Home program findings without requiring any further repayments from impacted homeowners. That means families will have the freedom and the ability to live free of Road Home related debt, make repairs, or even sell their property without having to worry about liens or payment plans.
“For more than 17 years , many Louisianans have not had the freedom to fully move on from the pain and trauma of Hurricanes Katrina and Rita – that changes today. I have made it a priority to clear the cloud of debt that has impacted too many families and individuals,” said HUD Secretary Marcia L. Fudge. “This action is about providing peace of mind and freedom. Louisianans have shown their resiliency and strength time and time again over the past years, and now they will feel the relief from this burden.”
In the aftermath of Hurricanes Katrina and Rita, over 130,000 Louisiana residents received more than $9 billion through Louisiana’s Road Home program, designed to incentivize single-family homeowners to remain in the community and rebuild. These funds were also intended for use to elevate and raise homes to make properties safer and more resilient for future floods. Through the program, nearly 13,400 homes were elevated, reducing risk from future storms, over 8,500 families were able to move to safer homes within the state, and over 39,000 households got money to install mitigation measures in their homes.
Unfortunately, some homeowners found that the total cost of recovery significantly exceeded the amount they received from the road home program and, therefore, some homeowners utilized the funds for other types of post hurricane repairs or other expenses. Through a 2010 HUD Inspector General report, this use of funds was determined, at the time, to be noncompliant with the program and as a result the State began an effort to recover the funds, which many well-meaning homeowners had already used to repair their homes. Currently, 700 homeowners have court judgements against them, 231 are in active judgment payment plans, and 2,365 homeowners are in active litigation about their debts. On average, homeowners with court judgements against them owed $46,000 to the state of Louisiana and today’s action will wipe that debt clean.
While in New Orleans, HUD Secretary Fudge met with the Saunders family, long-time residents of New Orleans who have lived in their house for 30 years. For more than a decade the Saunders family had great concern for their future because they held a Road Home debt of $30,000. Like some homeowners, the costs to elevate their home exceeded the funds they received and the family used the funds for post Katrina housing repairs and other expenses. Following that action, the state came to collect the $30,000 asserting it was not used appropriately. That was money the Saunders did not have, and they currently owe the full balance. With this agreement, the full balance of $30,000 owed will be cleared by the State and the family will no longer owe that debt. The Saunders now look forward to sending their nephew to college in the Fall.