BAYOU LA BATRE -- No trees have been cleared off, yet, and no ground has been broken where the dirt of Shine Road meets Alabama 188. But within a year, city officials want to use $17.6 million in federal funds to build two new neighborhoods here, with a total of 120 affordably priced homes.

The plan to build the homes has changed many times over the past two years. City officials said they hope the scheme they've finally settled on after long discussion will be approved by federal officials in early June.

"These are going to be nice homes in nice neighborhoods," said Mayor Stan Wright. "We're not going to create a monster, here."

The planned neighborhoods are intended in part to get Hurricane Katrina victims to move away from their old, flood-prone neighborhoods, city officials said. The Bayou also lost a third of its population after Katrina hit on Aug. 29, 2005, so city officials hope to regain its tax base by attracting former and new residents.

As it currently stands, the Shine Road project would construct two-, three- and four-bedroom modular homes priced at about $90,000 to $125,000. In earlier versions of the plan, the city considered building homes that would have been available to buyers for less money.

"We decided we wanted permanent, quality homes," Wright said.

Bayou La Batre will use $2 million -- part of the $37 million in HUD funds awarded to the city last June -- to install the neighborhood's infrastructure, including underground electrical wiring, drainage, sewer and water lines.

The homebuilding project has not been without a few false starts.

In October, city officials announced plans to build, in partnership with Volunteers of America Southeast, 105 modular homes on the 39.11-acre site beside Shine Road. Volunteers of America purchased the land with a $300,000 grant received that month from the U.S. Department of Housing and Urban Development.

Then, in December, Bayou La Batre won a $15.6 million Federal Emergency Management Agency grant, which city officials said would build 194 affordable modular homes costing about $50,000 each. That project was a partnership with the nonprofit DASH for the Gulf Coast, based in Mobile. DASH stands for dependable, affordable, sustainable housing.

The city and DASH planned, in addition to the neighborhood at Shine Road and Alabama 188, to create a second, 28-acre neighborhood at Argyle and Four Mile roads, said Janey Galbraith, the city's grants consultant.

Discussions between the nonprofits and the city stalled, however, and the city opted this month to simply hire a private homebuilder, Wright said. The city began discussions with Mitchell Homes, which offered to build the homes at about $98,000 apiece, Wright said.

City officials plan to meet with FEMA administrators in Washington, D.C., in early June to get official approval to use the $15.6 million to hire a private contractor rather than work through a nonprofit, Galbraith said.

In addition to building an array of traditional homes, Mitchell Homes constructs modular homes. Those are produced at a warehouse in Huntsville while crews clear the home site and pour the concrete foundation, said Russell Heidelburg, a real estate agent with ERA Marie McConnell Realty. His company sells Mitchell Homes dwellings at its Magnolia Pointe subdivision in Theodore.

Bayou La Batre will seek guidance from FEMA on whether it can hire Mitchell Company outright or if it must open the project to competitive bidding.

If the project goes through as planned, people will be able to apply to buy or rent the homes within a year, Galbraith said.

In selecting applicants, the city will give first priority to those who owned and occupied a home within the city limits of Bayou La Batre prior to Katrina, and who are currently living in a FEMA trailer, Galbraith said. Forty-nine families reside in travel trailers in the Bayou, FEMA officials said late last week.

Second priority will be given to pre-storm owner-occupants in Mobile County still living in FEMA trailers, she said. Currently, 369 families remain in FEMA trailers in unincorporated Mobile County, FEMA officials said.

"I don't think we'll get beyond those two groups. I think we'll fill up fast," Galbraith said.

The city will screen out applicants with felony records, and with any record of sexual misconduct, Galbraith said.

The city plans to offer special financing to would-be owners and renters with low incomes, said. Some will be eligible for up to two years without rent, she said.

"There are a lot of people who were poor before the storm, who lost their family homes, weren't insured, can't afford to rebuild and are living in travel trailers within the federal flood zone," Galbraith said.

Offering free rent for two years will hopefully "get those families out of harm's way" while allowing them to hold on to property that perhaps has been in their families for generations, she said. Also, monthly rent payments will go into an account, which can later be used as a down payment should the renter decide to purchase the home, she said.

"We want to make it as easy as possible," Galbraith said.

The city also plans to offer police officers and firefighters a special rental rate of $200 per month, she said.

"We want to create a place where families will feel safe," Wright said.