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FEMA sets deal for 1,500 Katrina homes

The Federal Emergency Management Agency has struck a deal to place needy Katrina families in 1,500 private homes rent-free for the next 18 months, NBC News has learned.
Robert Newsom removes debris from a house damaged by floodwaters in New Orleans, La., on Nov. 15. FEMA has struck a deal to place needy families in 1,500 homes.Tony Dejak / AP file
/ Source: NBC News and news services

The Federal Emergency Management Agency has struck a Thanksgiving-eve deal to place needy Katrina families in 1,500 private homes rent-free for the next 18 months, NBC News learned on Wednesday.

The deal comes after two months of delay, and growing criticism from lawmakers and the media. FEMA will begin placing families in the private, single-family homes early next week.

Fannie Mae, the giant housing-finance investor, is donating the 1,500 foreclosed-loan houses in nine Southern states to families that lost their homes to Hurricane Katrina.

The states are: Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Oklahoma, Tennessee and Texas.

NBC News located a dozen of the homes, which are in solid condition and in desirable neighborhoods in Houston, Dallas, Baton Rogue, Atlanta and other locations.

“We have struck an agreement with Fannie Mae, which removes some of the barriers toward placing people in the homes,” said FEMA spokesman Butch Kinerney. He said the agreement “protects the privacy of the evacuees but also gets them into some really exceptional housing before the holidays.”

FEMA began calling eligible families Wednesday, “so we’re going to be moving people fairly quickly,” Kinerney said.

Fannie Mae spokeswoman Janice Walker said that Fannie Mae, the second-largest financial institution in the United States, said, “We look forward to working with them on an ongoing basis to place evacuees in our properties.”

Announcement follows criticism
In an earlier statement to NBC Wednesday, FEMA said, "In our partnership with Fannie Mae, we're able to meet the privacy needs of displaced families while providing them warm and safe homes, just in time for the holidays.”

Lawmakers, including Mississippi Democratic Rep. Bennie Thompson, had criticized FEMA for not accepting the generous housing offer when Fannie Mae first offered the houses in September. FEMA turned down that deal because it worried that the privacy of Katrina families would be violated if prospective buyers wanted to come and inspect the homes.

Thompson is the top Democrat on the House Homeland Security Committee.

But after repeated inquiries from NBC News to both agencies, FEMA announced it would begin placing storm-affected families in the homes starting next week, and said it had worked out all its privacy concerns — two months after the initial offer.

Hotel housing extended
On Tuesday, FEMA extended its hotel housing program by a month in 10 states where most of the homeless evacuees sought shelter after Katrina and Rita. The announcement followed criticism that the agency was pushing hurricane victims out before the holidays.

More than 46,000 families in those states now have until Jan. 7 to move out of hotels and into travel trailers, mobile homes or apartments until they find permanent homes.

In all, FEMA is paying for 49,826 hotel rooms for hurricane victims at an estimated $3 million a day. The hotel program has cost the agency at least $300 million since Katrina hit Aug. 29, followed by Rita on Sept. 24. At the height of the housing crisis, FEMA was housing 85,000 families in hotels.

It was not immediately clear how FEMA would select the 1,500 families from tens of thousands who need homes, he said.

“We’ll try to match them up, city by city and county by county,” he said.