HUD Revises Policy That Prevented Some Sandy Victims From Receiving Grants

WASHINGTON, D.C. –The U.S. Department of Housing and Urban Development (HUD) announced a policy change this week that prevented some New Jersey residents affected by Superstorm Sandy from receiving Community Development Block Grants.

After Superstorm Sandy hit, HUD encouraged homeowners to apply for loans even if they were not certain if they wanted a loan. Many New Jersey residents could not afford to repay the terms of a loan and declined them.  Prior to HUD’s announcement , the state felt that it did not have the ability to give CDBG grants to those who applied for SBA loans and declined the loan even though they needed CDBG funds.

The HUD policy change announced in response to a letter from Congressman Frank Pallone Jr.’s (D-NJ-06)  sent July 12 gives New Jersey the flexibility to provide CDBG grants to those who declined SBA loans as long as the state identifies why the SBA loan was declined and establishes why CDBG assistance is appropriate for the applicant.

“This policy change is a victory for homeowners who were told to apply for SBA loans even though they may not have been able to afford the terms of the loan,” said Pallone. “With this new policy, homeowners who declined SBA loans will now be eligible for critical CDBG grants that will enable them to rebuild and recover from this historic storm.”

“Without the CDBG grants they needed, many New Jerseyans were faced with the decision between debt or not rebuilding. I’m relieved that HUD responded to my concerns and has revised this unfair policy,” added Pallone.

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