Pallone Delivers Millions in Relief to Low-income Sandy Survivors Caught Up in Red Tape

New Brunswick, NJ – Congressman Frank Pallone, Jr. (NJ-06) today announced that New Jersey has officially launched a new policy implementing the clawback relief he fought for and secured for Superstorm Sandy survivors. After years of Pallone’s advocacy, the State of New Jersey will now begin outreach to eligible homeowners who may no longer be required to repay disaster assistance that the Department of Housing and Urban Development has been seeking recoupment on for years. 

These recoupment efforts known as clawbacks have blindsided homeowners because many New Jersey residents owed tens of thousands of dollars through no fault of their own after applying for loans and benefits through various federal programs at the recommendation of the government. Preliminary assessments show that more than 400 New Jersey households are expected to collectively receive more than $16 million in relief from this recoupment waiver. Pallone encouraged the State to distribute relief as broadly as possible and to avoid placing new financial burdens on residents who have already been through so much.

“After years of pushing for fairness, today we are finally delivering financial relief for many Sandy survivors,” said Pallone. “The official launch of this program means hundreds of families will no longer have to bear the burden of having to repay the disaster aid they used to rebuild in the aftermath of Superstorm Sandy. Thanks to our advocacy, they can now – after many years – finally close this dark chapter and put this bureaucratic nightmare behind them.”

Pallone has fought tirelessly to ensure Sandy-impacted families are not burdened with repaying federal disaster aid. In 2022, Pallone secured an indefinite legislative extension of recoupment efforts for debt owed to the federal government that was included in the Omnibus Fiscal Year 2023 package but did not absolve homeowners of the funds owed.

In January, the Biden Administration agreed to Pallone’s request to provide relief to low- and moderate-income survivors, as well as those who have faced extreme hardship – including foreclosure, bankruptcy, or lost loved ones after receiving federal disaster aid. Eligible households facing extreme hardship may receive full forgiveness, while eligible low- and moderate-income households may receive up to $27,000 in forgiveness for federal assistance previously subject to repayment.

The New Jersey Department of Community Affairs (DCA) has already notified 278 applicants that their recoupment has been forgiven in full, totaling over $13 million collectively. The agency will continue reaching out to residents eligible for partial forgiveness over the coming weeks and months. No additional action is required at this time for eligible households, but affected New Jersey residents can visit DCA’s website to learn more about the policy.