LAGUNA NIGUEL

Victims of a February 1998 El Nino landslide received a promise of federal financial aid Tuesday, but they could still end up empty-handed if the city and federal government can’t agree on how to spend the funds.

Federal rules mandate that Federal Emergency Management Agency money be used to purchase damaged property, a tolerable option for two families whose homes were destroyed. But six other families want to use the money to repair the slopes so they can stay there. If the agency allows the money to be spent on slope repairs, city officials would propose that the homeowners waive their right to any future government aid.

The decision could affect all eight homeowners, because city officials could decide not to accept any federal money if the agency doesn’t change its policy. After receiving formal notification of the funding for the six houses, the City Council will decide whether to present a plan for using the money on repairs.