President Bush declared part of northern Nevada a national disaster area Tuesday, making federal relief available to victims of flooding that damaged hundreds of homes.

Bush signed the disaster declaration as building inspectors went door to door in the town of Fernley to assess millions of dollars of damage from the flood caused by a break in a century-old irrigation canal early Saturday.

The declaration makes available federal assistance including grants for temporary housing and home repairs, the White House press office said.

It also can be used to make low-cost loans to cover uninsured property losses and other programs to help individuals and business owners recover from the disaster.

Senate Majority Leader Harry Reid, D-Nev., also announced that Homeland Security Secretary Michael Chertoff pledged assistance to Nevada's flood victims during a telephone call Tuesday afternoon.

"I greatly appreciate Secretary Chertoff taking the time to personally call me and promise that the people of Fernley will get everything they need in the wake of the levee break," Reid said.

"I will continue to work with the Nevada congressional delegation, Governor Gibbons, federal and state officials to ensure that we can get these people back into their homes as quickly as possible."

Only one homeowner had a flood insurance policy before the canal collapsed. Water collected 8 feet deep in some areas.

There's no question that the bank collapse will lead to lawsuits, said Betsy Rieke, area manager for the federal Bureau of Reclamation.

"I think it'll be highly litigated," she told The Associated Press on Monday. "We believe the district would be liable."

Responsibility for the canal still has to be determined.

"The [federal] Bureau of Reclamation owns the canal, but the Truckee Carson Irrigation District manages it," Jeff Page, Lyon County's emergency services director, told about 400 residents during a meeting Monday night.

"So that's going to be an issue, who is responsible for what, and that's an answer I don't know," he said. "Hopefully when it comes time to fund it they will look at that it's a federal property and that will help push the directive to get done."

Rieke said she and her colleagues at the Bureau of Reclamation are unsure what caused the breach. She said the agency will examine soil and strata samples and look at the last canal rupture — a December 1996 collapse that flooded 60 Fernley homes — for clues.

Ernie Schank, president of the Truckee-Carson Irrigation District, said he's aware of at least six previous breaks in the canal. At least three occurred before 1926 when the federal government operated the canal, and three have taken place since, he said.

The 31-mile-long canal takes water from the Truckee River near Reno and delivers it to farms around Fallon, 60 miles east of Reno. The irrigation district's contract to operate it is renewed every five years and was last renewed in 2007.