The purpose of the Stafford Act is to provide an orderly and continuing means of assistance by the federal government to state and local governments in carrying out their responsibilities to alleviate the suffering and damage which results from disasters. The Stafford Act originally was enacted in 1974 and amended in 1988, 1993, and 2000. The Disaster Mitigation Act of 2000 established the IHP by combining two previous disaster grant programs - - the Temporary Housing Assistance and Individual Family Grant programs. Under the IHP, these programs were replaced by Housing Assistance and Other Needs Assistance. Looking specifically at the Housing Assistance component of the IHP, section 408 of the Stafford Act authorizes five types of assistance, of which four are relevant to disaster victims of Hurricanes Katrina and Rita: (1) Financial assistance to rent temporary housing. FEMA may provide financial assistance to individuals or households to rent alternative housing accommodations, existing rental units, manufactured housing, recreational vehicles, or other readily fabricated dwellings. (2) “Direct” temporary housing assistance. FEMA may provide temporary housing units (e.g., mobile homes and travel trailers), acquired by purchase or lease, directly to disaster victims, who, because of a lack of available housing resources, would be unable to make use of financial assistance to rent alternate housing accommodations. In other words, direct assistance would be available in situations where rental accommodations are not available. By statute, direct assistance is limited to an 18-month period, after which FEMA may charge fair market rent for the housing unless it extends the 18-month free-of-charge period due to extraordinary circumstances. (3) Repair assistance. Under this authority, FEMA may provide financial assistance for the repair of owner-occupied private residences, utilities, and residential infrastructure damaged by a major disaster. However, the maximum amount of repair assistance provided to a household is limited to $5,000, adjusted annually to reflect changes in the CPI. (4) Replacement assistance. This form of housing assistance authorizes funding to replace owner-occupied private residences. The amount of replacement assistance FEMA may provide to a household is limited to $10,000, adjusted annually to reflect changes in the CPI. For a victim to receive this assistance, there must have been at least $10,000 of damage to the dwelling. The victim may use the assistance toward replacement housing costs. As of September 25, 2006, proposed legislation was pending before Congress that would, among other things, eliminate the cap on home repair and replacement assistance. FEMA may provide ONA grant funding for public transportation expenses, medical and dental expenses, and funeral and burial expenses. ONA grant funding may also be available to replace personal property, repair and replace vehicles, and reimburse moving and storage expenses under certain circumstances. The maximum financial amount of housing and other needs assistance that an individual or household may receive is capped at $25,000, adjusted annually to reflect changes in the Consumer Price Index. Eligibility for IHP assistance is determined when an individual or household applies with FEMA and is based on the amount of property damage resulting from the disaster. For disaster victims with financial resources, SBA’s Disaster Loan Program is intended to be a primary resource available to aid in their recovery. FEMA refers disaster victims who apply for assistance and meet established income levels to SBA. Applicants who are denied loan assistance by SBA or have remaining unmet needs are sent back to FEMA for an assistance determination of their eligibility for certain types of ONA grant funding. (We reported on SBA’s efforts to provide disaster loans in response to the 2005 hurricanes in July 2006 and expect to issue another report on SBA’s response later this year.) Table 1 provides an overview of IHP benefits and identifies the ONA benefits that are subject to SBA disaster loan eligibility. FEMA manages the IHP primarily through a decentralized structure of permanent and temporary field offices staffed mostly by contract and temporary employees. The offices include permanent locations at the FEMA Recovery Division in FEMA Headquarters, regional offices, National Processing Service Centers, and temporary locations at Joint Field Offices, Area Field Offices, and Disaster Recovery Centers. Once the President declares a major disaster that is eligible for federal assistance, victims in declared counties must first apply for it with FEMA, by phone, over the Internet, or in person at a disaster recovery center. Figure 1 shows disaster victims waiting to speak with temporary disaster staff in October 2005 at a Disaster Recovery Center in St. Bernard Parish, Louisiana. Once a FEMA representative records personal information from a disaster application and provides the applicant with a FEMA application number, FEMA’s National Emergency Management Information System automatically determines potential eligibility for designated categories of assistance. FEMA refers disaster victims who apply for moving and storage, personal property repair or replacement, and/or vehicle repair or replacement related grant funding assistance and meet established income levels to SBA. Applicants who are denied loan assistance by SBA or have remaining unmet needs are sent back to FEMA for an assistance determination of their eligibility for certain types of ONA grant funding. To confirm that the home and personal property sustained damages as reported in a disaster assistance application, FEMA is to meet with disaster victims at their homes to conduct individual inspections to verify, ownership, occupancy, and damage. Figure 2 shows a FEMA inspection notice on a home in St. Bernard Parish damaged by Hurricane Katrina. Based on the results of the inspection and determinations made by staff at the National Processing Service Centers, FEMA approves or denies housing and/or other needs assistance. (Applicants may be eligible for either or both types of assistance.) If the applicant qualifies for a grant, FEMA sends the applicant a check by mail or deposits the grant funds in the applicant’s bank account. If an applicant is denied, he or she may appeal the decision by contacting a service center and providing additional information or clarification. Recipients of IHP assistance must recertify their continuing need for assistance every 30 to 90 days, depending on the type of assistance. Additional details about federal disaster assistance and IHP including the types of and eligibility for benefits, how the program is structured and implemented and the process for applying for and receiving program assistance are provided in appendix III. Because of the magnitude of the hurricanes and the extent of the resulting damage, the total number of applications for, and benefits provided through IHP in 2005 for Hurricanes Katrina and Rita far exceeded the combined total of the 2 years since the program was established in 2003. Two categories of assistance—temporary housing assistance and expedited assistance---- accounted for much of the significant increase in IHP expenditures for Hurricanes Katrina and Rita as compared to prior years. FEMA also provided a much greater amount of assistance for Hurricanes Katrina and Rita, than in prior years, for specific types of ONA benefits that are primarily provided only after applicants apply for and are denied an SBA disaster loan, indicating that the percentage of lower income applicants may have been a significant portion of total applicants. While the approval rate for housing assistance was greater than in previous years, the approval rate for ONA was notably lower for Hurricanes Katrina and Rita than the 2 previous hurricane seasons; 41 percent as compared to 65 percent in 2003 and 50 percent in 2004. Accordingly, the percentage of applicants FEMA identified as ineligible for housing assistance was lower while the percentage of ineligible applicants for ONA was higher for Hurricanes Katrina and Rita (44 percent) than for named hurricanes that came ashore in 2004 (31 percent). To establish a basis for eligibility, FEMA had to conduct a much greater number of inspections and accordingly, the related cost of those inspections were greater with Hurricanes Katrina and Rita than in 2003 and 2004 combined. Although FEMA referred more applicants to SBA for disaster loans for Hurricanes Katrina and Rita than in the prior 2 years, SBA returned about the same percentage of disaster loan applicants to FEMA for ONA consideration. FEMA received far more IHP applications, approved more requests for Housing and Other Needs Assistance, and awarded more grant money in 2005-2006 for Hurricanes Katrina and Rita than for all the hurricanes that resulted in a disaster declaration in 2004 (Ivan, Charley, Frances, and Jeanne) and 2003 (Isabel and Claudette) combined. Table 2 shows the number of applicants approved for both categories of IHP assistance and the grant award totals—as of August 2006, for Hurricanes Katrina and Rita and named hurricanes that came ashore in the United States in 2004. The table also shows the number of applications received by FEMA—as of September 2006. The number of applicants and both categories of IHP assistance for the 2003 named hurricanes were provided by FEMA as of April 2006. FEMA data as of August 2006, shows that two categories of assistance— temporary housing assistance and expedited assistance accounted for much of the significant increase in IHP expenditures for Hurricanes Katrina and Rita as compared to prior years, as shown in figure 3. FEMA specifically established a new transitional housing assistance allowance, as part of temporary housing assistance, to advance to Katrina disaster victims an amount equal to the initial 3 months of rental payments based on the national average rent for a 2-bedroom apartment. Expedited assistance is a pre-inspection disbursement of funds to disaster victims based on specific criteria such as the severity of the damage. (See glossary for definitions of all housing and other needs assistance categories.) Transitional housing assistance that was authorized exclusively for Hurricane Katrina, was estimated at about $1.3 billion while expedited assistance for both Hurricanes Katrina and Rita totaled an about $2.3 billion. By comparison, about $59 million was approved for hurricanes in 2004, while no expedited assistance was approved for hurricanes in 2003.