(CNN) -- A day after a report documented that many New Jersey homeowners hit hard by Superstorm Sandy were wrongly denied aid, the state announced that it will reopen the appeals process for those "initially deemed ineligible" for funding.
Richard E. Constable III -- commissioner of New Jersey's Department of Community Affairs -- said in a statement Friday that those turned down for government money through either the Reconstruction, Rehabilitation, Elevation, and Mitigation (or RREM) program or for a Homeowner Resettlement grant will now have another chance to make their case.
"We want anyone who is eligible under the guidelines to have a full and fair opportunity to receive assistance," Constable said, adding that applicants will receive a letter outlining how to appeal.
This came after a report issued Thursday by the Fair Share Housing Center, an organization that advocates for the rights of poor homeowners.
Public records obtained by the advocacy group show that 3,196 applicants were told by the Gov. Chris Christie's administration that they were ineligible for the program, which provides up to $150,000 to cover the cost of rebuilding and elevating a home.
Of the 1,033 who appealed the denial, 788 -- or 79% --- were told they were, in fact, eligible for recovery funds
A similar percentage of residents who were denied up to $10,000 to cover non-rebuilding costs also had their rejections overturned in the appeals process. The report shows that a majority of the applicants overall who were denied funds were minority homeowners.
"We were pretty shocked," said Adam Gordon, staff attorney at Fair Share Housing Center. "Thousands of people were wrongfully rejected, and it was impacting people all over the state. We were just shocked by the sheer magnitude of it."
Superstorm Sandy caused major devastation throughout New Jersey and neighboring states when it struck the U.S. mainland in late October 2012. That includes ravaging many communities along the Jersey Shore such as Seaside Heights.
The Fair Share Housing Center report came at a critical point in the recovery effort in New Jersey.
The state is preparing to distribute $1.46 billion in a second round of Sandy funding. At the same time, the U.S. Attorney's Office is investigating claims from Hoboken Mayor Dawn Zimmer that members of the Christie administration linked Sandy recovery funds to her approval of a real estate development project in her city.
CNN's Kristina Sgueglia and Greg Botelho contributed to this report.