Article From WLOX - Home Loans Available

Mississippi House OKs Loans For Homes Hurt By Katrina Surge, Flooding

People whose homes were damaged or destroyed by Hurricane Katrina's powerful storm surge or flooding could apply for interest-free loans of up to $25,000, under a bill that cleared the state House on Wednesday.

The proposal passed 116-3 and moves to the Senate for more debate.

House Ways and Means Committee Chairman Percy Watson, D-Hattiesburg, said the bill is aimed primarily at helping people in four of the southernmost counties: Hancock, Harrison and Jackson, which all touch the Gulf of Mexico; and Pearl River County, which is just north of Hancock on the Louisiana border.

The $250 million state proposal comes weeks after the announcement of $5.1 billion in federal grants to help Mississippians whose houses flooded in Katrina, despite being outside the federally designated flood zone.

For many people who won't qualify for the federal grant money, a state loan "probably would be the loan of last resort,'' Watson said.

Under the House bill, the state loans would be available only for primary homesteads and only for people who either didn't have flood insurance or who had too little flood insurance to cover the damage. A person receiving a loan would have to rebuild in the same county, but not necessarily on the same parcel of land.

A homeowner receiving a state loan would have 20 years to repay it. Watson said Mississippi would lose money on the program - first, because the state would pay interest on the bonds; and second, because officials anticipate that some receiving the loans might not repay the money. But he still said the program is the right thing to do to help people recover.

On a voice vote, the House defeated an attempt by Rep. Omeria Scott, D-Laurel, to expand the loans into any county that had "catastrophic'' damage, under federal definitions. That would've included Scott's home county of Jones, where Katrina's powerful winds uprooted hundreds of trees and caused widespread damage to homes.

Scott said she was not trying to take away aid from the coast.

"I represent an area that was hurt, and I'm just trying to get some help for my area,'' she said.
Watson, who also saw widespread damage from falling trees in his district, argued against Scott's proposal.

"Sometimes in our attempt to help many, we don't help any,'' Watson said.

Rep. Diane Peranich, D-Pass Christian, took a moment during the House debate to thank those trying to help the coast.

"We know it would be a situation of last resort, but I cannot tell you how much it would mean to us, out of despair to have hope,'' Peranich said.

Rep. John Read, R-Gautier, said he and his son are among the coast residents who lost homes to Katrina. He also thanked Watson for the loan proposal.

"As I see people daily, hope is fading,'' Read said. "As it's going on, it seems like it's getting worse.''

The bill is House Bill 1548.