- Associated Press - Sunday, August 29, 2010

WASHINGTON (AP) — Housing and Urban Development Secretary Shaun Donovan said Sunday that solid progress has been made in the past 18 months to return families to their homes in New Orleans and that several new programs are in the works to help try to revive the housing market.

Mr. Donovan said there is still “much ahead of us” to expand housing assistance in the city devastated by Hurricane Katrina five years ago.

But hes aid in an interview aired Sunday that 40,000 families were in trailers or on emergency housing vouchers when President Obama took office, and thousands were at risk of losing their homes within weeks.

He said that “98 percent of those families are in permanent housing” today. He said four public housing projects are being rebuilt and “hundreds of families have moved back in.” 

Mr. Donovan also said his department in the coming weeks will roll out an FHA refinancing program to help borrowers whose mortgages exceed the market value of their homes. He also said the department will launch “an emergency homeowners loan program” to help people who are unemployed keep their homes.

The secretary said that a drop in July home sales was expected with the end of the housing tax credit but that the decline was “clearly worse than we expected.” He said “it’s too early to say” if the credit will be revived.

Mr. Donovan spoke from New Orleans on CNN’s “State of the Union.”