Some communities won’t have to repay Katrina loans

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NEW ORLEANS (AP) — Cash-starved communities recovering from Hurricane Katrina have heard good news from Vice President Joe Biden on his visit to New Orleans.

Biden announced Friday that about 100 local governments that borrowed about $1.2 billion in federal disaster loans after the 2005 hurricane will be allowed to apply for “forgiveness.” They can be cleared of part or all of the loan amount. To qualify, a municipality must have had operating deficits during the three full fiscal years following hurricanes Katrina and Rita.

Louisiana Sen. Mary Landrieu says that decision will help ease the financial burdens of New Orleans and other cities. She says the governments were obligated to pay back the entire loan in 2011, which was used to cover a variety of operating costs.