City and federal officials Wednesday laid out their plans for distributing the first $1.77 billion in federal Sandy relief grants, more than three months after the superstorm devastated homes and businesses in the five boroughs.

Mayor Michael Bloomberg said the majority of the $1.77 billion in grants would go toward rebuilding and restoring homes.

More than 9,000 homeowners would be eligible for the money that could be used for restoration, mold removal and measures that would prevent future storm damage.

"These funds will help New Yorkers who were the hardest hit by Sandy get back on their feet and help communities build back stronger and smarter," the mayor said.

About $350 million of the federal Community Development Block Grants will go to people who own single-family homes, $250 million will be used for multifamily homes and $120 million will be spent on public housing.

Roughly $185 million of the federal funding, which is the first of the $51 billion Sandy relief package that Congress approved last month, will be used to provide damaged small businesses with low-cost loans and grants to repair and stormproof their shops.

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Bloomberg began his outreach efforts geared toward letting people know about the money at one of the Staten Island businesses that quickly bounced back from damage.

Bloomberg, Housing and Urban Development Secretary Shaun Donovan and Karen Mills, head of the Small Business Administration, shared a slice at Goodfella's Pizzeria Wednesday after the mayor announced his plans for distributing the federal cash.

The longtime restaurant sustained $75,000 in damage from Sandy, owner Scot Cosentino said, but continued to serve food to the recovering neighborhood with the help of generators and community members who came to its rescue.

"Small businesses are at the heart of communities like this," Mills said.

The city will dish out $185 million in grants and loans to pay for small business' renovations and flood-mitigation work.

Donovan said rebuilding smartly would be an important focus. "We know this isn't the first time New York will be in danger," he said. "We have to build safely."

The application approval process will take a few more months, Bloomberg said.

"We're going make sure that every single one of these things is well-documented, that people qualify for the loans," he said at a news conference at City Hall.

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The mayor defended criticism about the delay in funds, saying his plan to distribute federal money is the most efficient way.

"If you talk about government programs that can take years, doing it within a couple months and a few weeks it's instantaneous in government speak," Bloomberg said.

Although applications for the money won't be available until March at the earliest, Bloomberg reassured affected business owners that the city is moving quickly to assist them.

"If you need help, you have to let us know," he said.