Tighter Credit Slows Hurricane Katrina Recovery In New Orleans

Tighter restrictions to qualify for credit following the sub prime loan disaster has slowed the Hurricane Katrina recovery process for the city of New Orleans.

This is the finding of PolicyLink, a California based research group that analyzed data from various government-funded rebuilding subsidy programs targeted at assisting New Orleans residents in their rebuilding efforts following Hurricane Katrina.  In a recent study entitled: “A Long Way Home:  The State of Housing Recovery in Louisiana 2008,” PolicyLink found that the tightening national credit market is making it increasingly difficult for homeowners and landlords to secure loans needed to rebuild.

In a recent interview, Annie Clark, a PolicyLink research associate and a co-author of the report, told New Orleans City Business newspaper: “The standards for traditional loans have risen because of the credit crisis.”

The City Business article notes that New Orleans is a particular issue because for 80% of those who received government funded financial assistance the funds alone are insufficient to complete repairs, leaving many houses boarded up and unoccupied.

The study recommends that New Orleans, along with federal and state governments and work to create new grant and loan programs to assist those that will no longer qualify for a home loan.