Major Breakthrough: Sandy Survivors No Longer Required to Repay Federal Aid

On January 17, 2025, Congressman Frank Pallone Jr. (NJ-06) announced a significant relief measure for Superstorm Sandy survivors in Monmouth County. The U.S. Department of Housing and Urban Development (HUD) has approved Pallone’s request to waive the requirement for low- and moderate-income Sandy survivors, as well as individuals facing foreclosure or who lost loved ones, to repay disaster assistance funds. This federal waiver eliminates the obligation to return disaster aid, a policy that Pallone argued imposed undue hardship on those still recovering from the storm’s aftermath. The relief is expected to be worth millions of dollars, positively impacting hundreds of households.

“Superstorm Sandy devastated our state, and for far too long, disaster aid clawbacks added unnecessary hardship for people still trying to recover,” said Pallone. “Every time I spoke with survivors, I heard stories of fear and uncertainty about how they would pay back money they used to rebuild their homes and lives. This relief is about justice for those who have endured so much—people who lost everything through no fault of their own—and ensuring they can finally move forward without this unfair financial burden. It’s a step toward helping our state heal, and I’m grateful to HUD for working with us to make this happen.”

The waiver provides targeted relief to eligible low- and moderate-income households, allowing forgiveness of up to $27,000 in disaster assistance debt. It also benefits those who experienced foreclosure, bankruptcy, or the loss of a loved one after receiving federal disaster aid. The State of New Jersey will now determine eligibility among approximately 900 households who have been asked to return more than $30 million in federal disaster assistance. In 2022, Pallone advocated for an indefinite pause on federal recoupment deadlines, laying the groundwork for this permanent relief.

Joe Mangino, Board President of the New Jersey Organizing Project, joined Pallone at the event, stating, “This is major progress for us and low- and moderate-income Sandy families who will see forgiveness, survivors who have had to file for bankruptcy or are in foreclosure, and those heartbreaking cases where Sandy survivors have passed away. These are the folks who need the life jacket the most. It will mean everything. We are so grateful to Congressman Pallone for spearheading this major step forward and for fighting for clawback forgiveness alongside Sandy survivors for years. We know he’ll continue to stand with us and work toward relief for all of us.”

This development follows years of advocacy to address the financial burdens imposed on Sandy survivors. In July 2021, Representatives Pallone, Bonnie Watson Coleman (NJ-12), and Andy Kim (NJ-03) applauded the House passage of an appropriations bill that provided relief for families required to repay disaster relief funds received after Superstorm Sandy. The provisions granted the HUD Secretary the authority to waive the requirement for New Jersey homeowners to repay federal disaster relief aid, also known as clawbacks, which had created financial burdens during a time of economic crisis.

In December 2024, Pallone joined storm and fire survivors in Washington, D.C., to demand comprehensive and equitable disaster recovery solutions. He called for the permanent authorization and full funding of HUD’s Community Development Block Grant-Disaster Recovery program and the swift passage of a $98.6 billion disaster supplemental request submitted to Congress by the Biden Administration. Pallone emphasized that the recovery system was broken and that families were waiting too long for help.

The issue of disaster aid clawbacks has been a significant concern for Sandy survivors. In 2015, Senator Chuck Schumer announced that HUD would waive the ‘duplication of benefits’ review for nearly all Superstorm Sandy victims, allowing them to keep flood insurance settlement funds without fear of clawback. This decision was aimed at preventing additional financial strain on homeowners who had already endured significant losses.

Despite these efforts, many New Jersey residents continued to face challenges related to disaster aid recoupment. Advocacy groups highlighted that confusion and bureaucratic hurdles often led to “clawbacks” of relief aid reaching into the tens of thousands of dollars. Families who believed they had complied with all requirements were later surprised by letters demanding repayment, exacerbating their financial and emotional stress.

The recent HUD waiver represents a significant step toward alleviating these burdens and providing long-awaited relief to affected families. By forgiving disaster assistance debt for eligible households, the waiver aims to help survivors move forward without the looming threat of financial recoupment. This action underscores the importance of responsive and compassionate disaster recovery policies that prioritize the well-being of affected communities.

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