Order Code RS22828
March 5, 2008
Mortgage and Rental Assistance as Disaster
Relief: Legislation in the 110th Congress
Francis X. McCarthy
Analyst in Emergency Management Policy
Government and Finance
Summary
During the first session of the 110th Congress, Senators Feinstein and Boxer
introduced S. 2386, the Mortgage and Rental Disaster Relief Act of 2007. The
legislation would reinstate a Robert T. Stafford Disaster Relief and Emergency
Assistance Act (Public Law 93-288, as amended) provision that provided mortgage and
rental assistance to disaster victims. Mortgage and Rental Assistance (MRA) had been
dropped from the Stafford Act by P.L. 106-390, the Disaster Mitigation Act of 2000
(DMA2K).

MRA provided economic aid to help households remain in their residences by
assisting with mortgage or rent payments for a period of up to eighteen months. This
is distinct from temporary housing assistance under the Stafford Act that provides rental
assistance due to disaster damage that makes a residence uninhabitable. For MRA help,
the applicant had to prove a loss of income due to the disaster event.
The MRA provision in S. 2386 differs from the previous MRA provision in that
it establishes eligibility based on an income threshold. In order to qualify for the
proposed MRA assistance, an individual or household would be required to have an
adjusted gross income that does not exceed $75,000. The bill would provide an
exception to this threshold in areas with a high cost of living, as determined by the
President, although it could not exceed $100,000.
This report summarizes the previous MRA provision administered by the Federal
Emergency Management Agency, the issues that were a part of the discussion prior to
its removal in P.L. 106-390, and questions that have been raised since 2000 regarding
mortgage and rental assistance.

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History of MRA and its Implementation. From 1970 through 2000 the Stafford
Act1 authorized the President to provide assistance to disaster victims unable to make
mortgage or rental payments after a major disaster.
(b) Temporary mortgage and rental payments
The President is authorized to provide assistance on a temporary basis in the form of
mortgage or rental payments to or on behalf of individuals and families who, as a
result of financial hardship caused by a major disaster, have received written notice
of dispossession or eviction from a residence by reason of foreclosure of any
mortgage or lien, cancellation of any contract of sale, or termination of any lease,
entered into prior to such disaster. Such assistance shall be provided for the duration
of the period of financial hardship but not to exceed 18 months.2
This provision was removed from the Act in Public Law 106-390, the Disaster Mitigation
Act of 2000 (DMA2K).
MRA authority was rarely used in comparison with other Stafford provisions such
as temporary housing, disaster unemployment assistance, or crisis counseling.3 In
testimony during the 108th Congress, then Department of Homeland Security (DHS)
Deputy Inspector General Richard L. Skinner noted:
FEMA historically has not had to implement the Mortgage and Rental
Assistance (MRA) program on a large scale because previous disasters did not
coincide with nor result in widespread unemployment and national economic
losses. From the inception of MRA until September 11, 2001, only $18.1 million
had been awarded under the program for 68 declared disasters, compared to
approximately $76 million as a result of the New York disaster alone.4
The total of $18.1 million is a small component of the disaster relief program that
has received appropriations in excess of $200 billion over the last 18 years.5 When the
amount expended for MRA is averaged for 68 disasters, the average amount provided per
disaster was approximately $265,000 per event. Not only was the amount spent on MRA
1 The Stafford Act (P.L. 93-288 as amended, 42 U.S.C. 5121 et. seq.) establishes the basic
authorities for federal disaster relief assistance. This assistance supplements the work of state
and local governments and provides help for needs that are not addressed by insurance. The
Stafford Act, through a delegation from the President, is administered by the Federal Emergency
Management Agency (FEMA), a part of the Department of Homeland Security (DHS).
2 42 U.S.C. § 5174, 84 Stat. 1752.
3 42 U.S.C. § 5174, 5177, and 5183.
4 U.S. Congress, Senate Committee on Environment and Public Works, Testimony of Richard L.
Skinner, OIG Response to September 11, 108th Congress, 1st. Sess., September 24, 2003, p.2.
5 For more information see CRS Report RL33226, Emergency Supplemental Appropriations
Legislation for Disaster Assistance: Summary Data, FY1989 to FY2007,
by Justin Murray and
Keith Bea and CRS Report RL33053, Federal Stafford Act Disaster Assistance: Presidential
Declarations, Eligible Activities, and Funding,
by Keith Bea.

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relatively small, but it was used in few disasters, only 6% out of the 1,400 declarations
during the three decades it was in existence.6
MRA did provide significant assistance after a December 1998 freeze in
California. This event had a direct effect on workers who were employed in the
agricultural sector in need of short term help to retain their homes and apartments. During
the following year, more than 6,000 individuals registered for MRA assistance with an
estimated program cost of nearly $7 million.7

The most expensive or costly use of MRA, as referenced in Mr. Skinner’s
testimony, was the 9/11 terrorist attack in New York City; FEMA distributed $76 million
for mortgage and rental assistance, more than four times the amount of total spending in
the program’s history. The 9/11 event came after the passage of P.L. 106-390 which had
deleted the MRA program from the Stafford Act. However, the changes did not take
effect until the corresponding regulatory changes had been implemented on May 1, 2002.
As a result, program funds were available to those suffering economic losses in New York
City following the September 11, 2001 attacks.
MRA Retention/Deletion. FEMA had rarely used its MRA authority when
Congress considered DMA2K. While some FEMA staff had understood and valued the
utility of the program for events such as the California freeze declaration previously
discussed, the staff also considered the program an administrative burden. The
administrative problems associated with the MRA program discussed by FEMA staff
included:
1) defining the victim (i.e. distinguishing between a disaster victim and a victim
of general economic downturns); 2) determining the extent of an applicant’s
inability to pay rent or a mortgage (percentage of loss of income does not take
into account assets that an applicant might have independent of a reduction in
one’s salary); 3) administrative difficulty of documenting case files (verifying
loss of income and lateness in paying mortgage or rent is time-consuming, and
applicants subsisting in a cash economy often have little documentation to
support their MRA applications); and 4) determining the appropriate period for
the provision of MRA assistance.8
While some observers considered elimination of the program justified by its
infrequent use and difficulty in administration, others, such as the regional staff that had
managed MRA in the field, considered the program a practical option for meeting certain
needs created by some disasters.
6 U.S. Department of Homeland Security, Federal Emergency Management Agency, “Major
Disaster Declarations,” at [http://www.fema.gov/news/disasters.fema?year=2001#sev1].
7 U.S. Department of Homeland Security - Federal Emergency Management Agency, “California
Freeze Disaster Assistance Deadline Approaches,” August 2, 1999, Release Number 1267-23,
at [http://www.fema.gov/newsrelease.fema?id=9768].
8 U.S. Federal Emergency Management Agency, Draft Memorandum, “Mortgage and Rental
Assistance” by Mike Hirsch, former FEMA Deputy General Counsel, May, 2003.

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The minimal use of the previous MRA program after most disasters is difficult to
ascribe to any one explanation. While some have posited FEMA’s reluctant stewardship
of the program to its infrequent use, others point to the rare incidence of the type of
disaster that would have such a devastating economic impact over a prolonged period of
time that would require MRA assistance.
The decision to eliminate the program was influenced by cost considerations, since
its removal did reduce estimated spending under the Stafford Act. The Administration and
Congress were in accord that savings were needed since DMA2K would potentially
increase mitigation spending within the Stafford Act.

Since its authority expired in 2002, the MRA program was not available in the
aftermath of the Gulf Coast hurricanes of 2005. The absence of the program at that time
did not evoke controversy, arguably due to the initiative taken by many lenders and
mortgage holding institutions to alleviate the pressure on mortgagors following the
hurricane events. This was accomplished through suspended payment schedules and
other initiatives undertaken to lessen the impact on those affected by the hurricanes.9
These were special steps taken in reaction to the massive impact of the 2005 hurricane
season; mortgage holders do not routinely take such actions following disaster events.
MRA and the 9/11 Disaster. As noted earlier, expenditures for the MRA
program following the World Trade Center attacks were the largest in the history of the
program. Given the unique nature of the disaster, it also posed many problems for the
administration of the MRA program. The sheer nature of the attack, and its reverberations
in the national economy, meant that FEMA had to decide how to define the area of
eligibility and the connection to the disaster event. Since 9/11 was considered an event
of national scope, it was argued by some that the national economy was affected, and
therefore eligibility for MRA assistance should be determined on a nationwide basis.
Later, under Congressional pressure, FEMA expanded the eligibility guidelines, but only
for residents in New York City.10

FEMA initially determined that applicants were eligible for MRA assistance if
they lived in certain areas near the World Trade Center site and had lost 25 percent or
more of their income as a result of the disaster. But the actual guidelines for eligibility
changed during the recovery period.11 As the General Accounting Office noted in a report
on 9/11 federal activities:
FEMA, as directed by the Congress, extended assistance to those who lost 25
percent or more of their income working anywhere in Manhattan, to those whose
employers were not located in Manhattan but were economically dependent on
9 For more information see CRS Report RL34087, FEMA Disaster Housing and Hurricane
Katrina: Overview, Analysis, and Congressional Options,
by Francis X. McCarthy, pp. 23 and
24.
10 David W. Chen, “After Criticism, US Broadens 9/11 Aid Pool,” New York Times, at
[http://query.nytimes.com/gst/fullpage.html?res=950DE5D9113EF9A15755COA9649C8B63].
11 U.S. Department of Homeland Security - Federal Emergency Management Agency, “FEMA
Expands Guidelines to Assist More Individuals,” Release -1391-122, June 18, 2002, at
[http://www.fema.gov/news/newsrelease.fema?id=5570].

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a Manhattan firm; and to anyone living in Manhattan who commuted off the
island and who suffered financially because of the post-September 11 travel
restrictions.
In a December, 2002 report that examined this program, FEMA’s Office of
Inspector General (IG) noted that the unique nature of the disaster and its
economic impact required FEMA officials to expand eligibility guidelines more
broadly than ever before. This resulted in FEMA having to reevaluate
applications, reverse previous determinations to deny benefits, and attempt to
contact applicants initially denied but now eligible under the expanded
guidelines.12
The administrative challenges of the 9/11 program in New York identified in the
IG report appeared to confirm the reluctance among FEMA leadership to revive the MRA
program within FEMA’s authorizing legislation or even to suggest such an action in the
wake of the hurricane seasons of 2004 and 2005. FEMA staff reportedly did consider
options for the revival of the program, including a further delineation of eligibility for the
program; transfer of the program to other federal entities; and transfer of administrative
responsibility to a private sector agency or organization.13 However, these options were
never presented as a legislative proposal to the authorizing committees of Congress.
Analysis of Legislative Proposal. The Mortgage and Rental Disaster Relief
Act of 2007 (S. 2386) builds on the previous MRA program while addressing several of
the concerns of FEMA mentioned above and would take new steps to further define
components of the MRA program.
! First, the bill provides several defining elements of the term
“financial hardship” used to determine eligibility but would still
leave room for regulatory definitions.
! Second, the bill would set an income threshold to qualify
applicants for participation. Currently, no Stafford Act provisions
have an actual household income threshold for eligibility. The
setting of an income threshold arguably helps target assistance to
those with the most acute need.
! Third, the proposed bill would maintain the same 18 month time
frame for potential assistance that was a part of the previous MRA
program. That time period also conforms to FEMA’s temporary
housing assistance program.

While addressing those key elements of the MRA program, the bill does not
identify the agency or department that would be charged with implementation, instead
providing the authority, like almost all of the Stafford Act, to the discretion of the
President. A recurring FEMA concern, as addressed by staff in conversation regarding
the MRA program, was that it (FEMA) was not the appropriate agency to administer this
program. Among other questions has been the ability of FEMA to manage a program that
is based on individual economic distress. However, those same concerns could arguably
12 U.S. General Accounting Office, September 11 - Overview of Federal Disaster Assistance to
t h e N e w Y o r k C i t y A r e a ,
G A O - 0 4 - 7 2 , O c t o b e r 2 0 0 3 , a t
[http://www.gao.gov/new.items/d0472.pdf].
13 Ibid. Hirsch.

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apply to other forms of assistance currently provided by FEMA, such as temporary
housing assistance and other forms of financial aid provided through the Other Needs
Assistance program.14
Further, though S. 2386 does not direct FEMA to obtain professional expertise
from other departments, this collaboration already occurs in other Stafford Act programs
that FEMA administers. For example, while DHS and FEMA coordinate disaster relief
on behalf of the President, FEMA receives assistance from two other federal
departments in the delivery of federal Stafford Act assistance. The Department of Health
and Human Services provides program guidance and monitoring of the Stafford Act’s
Crisis Counseling program15 and the Department of Labor assists in the administration of
the Disaster Unemployment Assistance (DUA) program.16

The bill, as introduced, applies to any disaster declared on or after October 21,
2007.
Even absent an MRA program, many of the remedies used in the aftermath of
Katrina (rescheduling payment calendars, modification of loan terms, moratoriums on
foreclosures), may already be available for Federal Housing Authority (FHA)-insured
mortgages.17 However, forbearance following Katrina for mortgages not under the FHA
program was ad hoc. Another source of current relief is in the agricultural sector. The
U.S. Department of Agriculture’s (USDA) Rural Housing Service has issued a Request
for Proposal to assist low income farm workers during emergencies and disasters. One
of the eligible categories for assistance listed under this special program is “assistance in
meeting rent or mortgage payments.”18 Public Law 110-28 appropriated $16 million for
emergency services for migrant workers.19
In sum, S. 2386 would restore the MRA after a hiatus dating to May 2002, but
modify it to add income caps for eligibility and thereby, among other things, limit the
overall amount of assistance that otherwise might be provided. However, possible
opponents may, on the one hand, question the need for additional expense and
administrative burdens at this time or, on the other hand, question why mortgage and
rental assistance within a hard-hit community should be subject to income caps at all if
basic program eligibility standards demonstrating economic distress have been met.

14 42 U.S.C. § 5174.
15 See CRS Report RL33738, Gulf Coast Hurricanes: Addressing Survivors’ Mental Health and
Substance Abuse Treatment Needs
by Ramya Sundararaman, Sarah A. Lister, and Erin D.
Williams.
16 See CRS Report RS22022, Disaster Unemployment Assistance (DUA) by Julie M. Whittaker.
17 For more information, see CRS Report RS22358, The Role of HUD Housing Programs in
Response to Hurricane Katrina,
Maggie McCarthy, Coordinator.
18 U.S. Department of Agriculture, “Request for Proposals: The National Emergency or Disaster
Grants To Assist Low-Income Migrant and Seasonal Farmworkers,” 73 Federal Register 6467,
February 4, 2008.
19 P.L. 110-28, 121 Stat. 218.