The city on Feb. 28 has to report to the state its progress in administering the $104 million federal Community Development Block Grant program.
Ike slammed the Galveston area on Sept. 13, 2008, becoming the costliest natural disaster in Texas history by leaving behind overall damage topping $29 billion.
Galveston has until September 2011 to spend the grant money, or it will be forced to return the funds to the Department of Housing and Urban Development.
Deb Siefert, who heads the application process, says Galveston officials initially feared.
too few homeowners would participate, but now it appears the city is ahead of schedule. So far more than 1,100 homeowners have applied for grants.