It has been beset by controversy, including the quiet firing of another contractor paid to set up the entire program, a contract worth $68 million. That company, Hammerman & Gainer Inc., was terminated last month and paid a $10 million settlement in addition to work completed.
An additional $390 million is included in the plan for a second round of federal funding.
About 5,100 homeowners have been approved for grants, 1300 have completed signings totalling $146 million, but just $25 million has been paid out for work already completed. Department of Community Affairs Commissioner Richard E. Constable III said at a public hearing this week that the waiting list stood at "north of 7,000."
Constable said in a statement Thursday night that homeowners working with URS were informed by letter that the state was transitioning from three program managers to two. They were to be contacted by their new RREM program manager to discuss the "next steps on their application."
"As we note in the letter, this change will have no impact on their assigned Housing Advisor or their case status," Constable said in the statement.
An administration source said that the transition of URS out of the program is "not performance related" but because "there is no longer a need for three RREM program managers, only two."
The state has found that a high number of people are selecting their own contractors as opposed to using a RREM-selected contractor, which it says made a third program manager unnecessary.
Frustrated homeowners, however, painted a picture in which there appeared to be a need for additional bodies to conduct the seemingly endless stages of review required before any work can proceed.
At Tuesday's public hearing, one woman spoke of a nine-month wait for reviews to be completed, another described contractors insisting on asbestos and lead reviews for a house that had been torn down, and a third said the process was more stressful than his time in Afghanistan.
The RREM program has also come under fire for erroneous denials of eligibility. Nearly 80 percent of those who appealed were subsequently found to be eligible.
State officials continued to blame onerous federal Department of Housing and Urban Development regulations for the quagmire, including historic, archeological, and environmental reviews, and assurances that grants do not duplicate other aid.
Lisa Ryan, a DCA spokeswoman, said HUD requires eligible homeowners to jump through numerous hoops and reviews, "much of which we and Gov. Christie have felt is unnecessary and redundant. . . . Nonetheless, these are the rules, in place largely in response to the abuse and fraud post-Katrina."
"But as we move homeowners through the process and get environment and historic clearances," Ryan said in an e-mail, "we immediately schedule homeowners for their grant agreement signings."