ASBURY PARK, N.J. -- A mass of red tape befell the Van Houtens of Union Beach, N.J., after they received preliminary approval for a New Jersey-administered resettlement grant in the wake of Superstorm Sandy.

Jeannette Van Houten had urged people in her neighborhood to apply for federal aid. ...

The Van Houtens were rejected for the grant to help them rebuild, even though they had followed the rules and registered with FEMA. A form letter said: "You do not meet the eligibility requirements for assistance through this program because there is no confirmation for FEMA registration for assistance," the state Department of Community Affairs wrote.