LAPLACE — The U.S. Department of Housing and Urban Authority has released long-awaited guidance regarding duplication of benefits, officials said.

For many, Small Business Administration loans are being considered a duplication of benefits for federal grant dollars available through Restore Louisiana.

The Office of Community Development is working with Housing and Urban Authority to fully understand the requirements of the guidance, which will soon go into effect once published as a notice in the Federal Register.
The collaborative effort will result in a required action plan amendment to modify the Restore Louisiana policies and procedures.

According to officials, Restore Louisiana will contact impacted homeowners with more detailed information about their specific accounts and any additional documentation that may be required.

Pat Forbes, executive director for the Office of Community Development, said help for impacted residents could come sooner rather than later.

“The good news is that Restore Louisiana may be able to soon move forward with processing reductions in duplication of benefits in cases where homeowners declined the Small Business Administration loan amount they were approved for, regardless of income,” Forbes said.

“Because the program has been preparing for this for months, and we do not believe an action plan amendment is necessary for this portion of the guidance, homeowners who outright declined their Small Business Administration loan may expect to receive notification from the Restore Louisiana program in the coming weeks.”

The guidance includes various stipulations for how Restore Louisiana may update the grant duplication of benefits calculation, depending on whether a homeowner declined, canceled, or drew down in whole or part Small Business Administration loan funds, as well as whether a homeowner’s total household income is below or above 120 percent of the area median income.

Area median income defines the midpoint of a region’s income distribution while also taking into account an individual’s parish and household size, according to Restore Louisiana.

Restore Louisiana program representative Marvin McGraw issued information on the current understanding of the guidance:

For homeowners who declined or canceled the Small Business Administration loans they were approved for, the Small Business Administration 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 action plan amendment to the Department of Housing and Urban Development to provide funds for repayment of Small Business Administration loan funds disbursed to homeowners. Once that action plan amendment is approved, Restore Louisiana will be able to provide funds for repayment of the drawn down amounts of Small Business Administration loans for all households at or below 120 percent Area Median Income.

Households with income above 120 percent Area Median Income may also be able to receive funds for Small Business Administration loan repayment if they can demonstrate a “hardship.” Housing and Urban Development as part of the substantial action plan amendment must approve the criteria for a hardship exception. Housing and Urban Development must approve homeowners’ financial hardship justification on a case-by-case basis.