I have known Bruce Sprague for 30 years. He has always been a contributor. He flew cargo planes in Vietnam back in the 1970s and was honorably discharged from the Air Force as a Major. Then he captained commercial planes for Continental Airlines. Most recently, he taught military pilots how to transition to commercial aircraft. Like most pilots who live to the age of 73, Bruce follows procedures religiously and always has backup plans to his backup plans. But lately, life has dealt him a series of blows that have left him flying on fumes with only one engine.

In 2006, at age 60, FAA regulations forced him to retire from flying. Then in 2008, the financial crisis wiped out a large part of his retirement savings. Next, in 2017, he flooded from Hurricane Harvey. Then the Texas General Land Office (GLO) denied him a grant under the Homeowner Assistance Program (HoAP) because he had already taken out an SBA loan. And most recently, he lost his teaching gig when the airline industry went into a tailspin due to the corona virus; no new pilots needed!

So now, Bruce is trying to regain altitude by appealing the grant rejection, but the GLO is still stalling him.

This is the story of a man who has been 1) forced out, 2) wiped out, 3) flooded out, 4) ruled out and 5) “virused” out.

Despite all that, Bruce has maintained a positive attitude. I’m writing this because he symbolizes, according to a GLO estimate, a thousand other Texans caught in a similar bind.

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Waking Up on August 29, 2017, to a Changed Life

Rehak: What happened to you and your home during Harvey?

Sprague: Like most people, we went to bed on the night of August 28th thinking we were safe. But on the morning of the 29th we woke up to find an army of insects marching in front of a what felt like a tidal wave headed toward our house. Soon, the water started creeping in. It eventually reached 25 inches in the house and 30 inches in the garage.

Rehak: Did you have flood insurance?

Sprague: No. We are in the 500-year flood plain.

Rehak: What happened next?

Reconstruction, Loans and Grant: Start of Even Bigger Problem

Sprague: Luckily, our son in law is in a business that regularly uses lots of contractors. He got people repairing our home right away. And they only charged us cost. No markup. That was the good news. But because of financial losses in 2008, we still had a mortgage and less in our retirement fund than I planned. So we applied for an SBA loan. And they loaned us about $90,000. We also got about $30,000 of individual assistance from FEMA. But the repairs cost $130,000 and that didn’t include contents and replacement of two cars. At any rate, we were able to get back in our house by Christmas, which was close to a record.

Rehak: Some time later, HUD Homeowner Assistance grants became available and you applied for one. Did you see anything in the fine print to cause you concern?

Sprague: Yes, there was a clause called “Duplication of Benefits.” It said that if we had taken an SBA loan, we would not be eligible for the grant.

Rehak: Did you ask about that?

Sprague: Yes, the person at the City who processed our application for the General Land Office said that would not be a problem. “Not to worry about it,” she said.

Rehak: So you applied?

Sprague: Yes. We went thru a year long process to fill out forms. We made multiple visits to the HoAP offices, and many, many phone calls and emails.

Loan With Interest Classified Like Grant

Rehak: What happened?

Sprague: They denied us.

Rehak: Why?

Sprague: Duplication of benefits.

Rehak: How is a loan that you have to pay back with interest a “benefit”?

Sprague: Those are their rules. But that wasn’t our only problem. Even though we had receipts totaling $130,000 for repairs, and even though most other people in the neighborhood paid more than $200,000 to repair their homes, the City inspector estimated we only had about $105,000 worth of damage. That reduced the amount of any potential grant.

Not Following Katrina Model

Rehak: When people hear the words “duplication of benefits,” it conjures up images of double dipping and fraud.

Sprague: Right. Had we applied for GRANTS that totaled more than we paid, I would agree with that. But a loan is not a grant. You have to pay it back…with interest. So you’re not defrauding the government unless you default on the loan. Look at it this way.

We had way more in repair costs than the total of our loans and grant. And they’re not even considering a homeowner assistance grant.

That’s just not fair. A lot of people think that, not just me. After Katrina, they allowed people in New Orleans to pay down their SBA loans with homeowner assistance grants. It was NOT considered a duplication of benefits then!

Rehak: So, what did you do next? You’ve worked in and around government for decades.

Crenshaw Rallies Support in Congress and With Trump

Sprague: I went to Congressman Dan Crenshaw. He and his staff have been terrific. He got ten other members of Congress to send a letter to President Trump explaining that SBA loans should not be considered a duplication of benefits. That was not Congress’ intent. Trump agreed and had HUD-leader Ben Carson publish new guidance for duplication of benefits for Harvey. [See Section VB2 on page 28841 of Federal Register.]

But the Texas General Land Office, which was overseeing the distribution of these funds in Texas, still has not changed their rules. They said the new guidance came “too late.” They also said they didn’t have enough money to make grants to people who also had loans. So, Crenshaw pushed an additional $45 million appropriation through Congress.

Rehak: Where does that stand now?

Appropriations Bill Stalled In Senate Due to Virus

Sprague: It stalled in the Senate because everyone is focusing on corona virus now. The GLO has not changed its position. They say that even though Congress and the President have clarified their position, “the rules came too late.”

Rehak: That leaves you in limbo. And you’re dealing with two disasters now: Harvey and the virus.

Sprague: I understand that people are just doing their jobs, that they have rules to deal with, and they’re trying to prevent fraud. But it sure is frustrating when the President tells someone in his chain of command, “This is how I and Congress want this to work,” and then people down the line don’t follow instructions.

Rehak: Are you holding out much hope for a grant at this point?

Sprague: No time soon. It’s been more than two and a half years since Harvey. When natural disasters destroy people’s lives and homes, they need help right away, not three or four years later.

Hoping Appeals Last Long Enough

Rehak: Have you appealed?

Sprague: Yes. We’re on our second appeal. Three appeals are possible. We’re hoping we can keep this going long enough for Crenshaw’s appropriations bill to get some traction in the Senate and for the GLO to revise its rules.

Rehak: Is there any hope in the Senate? Have you approached Cruz or Cornyn?

Sprague: I’ve gotten some nice form letters back from them saying they are “working for all Texans.”

Rehak: What do you hope for at this point?

Sprague: I just hope we survive corona so our heirs don’t inherit a mountain of debt with our house. Until now, I’ve never asked anything from my government. I hope just this once they come through.

Posted by Bob Rehak on 4/4/2020

949 days after Hurricane Harvey

Note: This report for the Congressional Research Service describes issues with the Duplication of Benefits provision.