Florida could begin drawing down on $418 million to offer mortgage payment assistance to thousands of unemployed and under-employed as they seek re-employment, a statement from the Treasury Department said today. The state will also offer principal reduction or second lien extinguishment if necessary to achieve a mortgage modification. The funds are part of the first round of funding available under the “Hardest Hit Fund” foreclosure-prevention funding under plans approved on Wednesday by the Obama Administration. Other states targeted for funding in this first round are Arizona, California, Michigan and Nevada, totaling $1.5 billion.
President Obama established the Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets (“Hardest Hit Fund”) in February 2010 to provide targeted aid to families in the states hit hardest by the housing downturn. The states approved to receive aid today as part of the first round of funding provided through this program each experienced a 20 percent or greater decline in average housing prices.
Each state Housing Finance Agency (HFA) gathered public input and created Hardest Hit Fund programs designed to meet the unique challenges facing struggling homeowners in their respective housing markets. The five HFAs submitted their Hardest Hit Fund proposals to Treasury on April 16. Treasury then reviewed each state’s proposals to ensure compliance with the Emergency Economic Stabilization Act (EESA) and offered technical assistance to develop performance and reporting metrics. Approved states will now begin to set up and roll out their specific Hardest Hit Fund programs in order to provide relief to struggling homeowners as soon as possible, with specific implementation timing depending on the types of programs offered, specific state-level procurement procedures, and other factors.
The proposals approved today include programs to assist struggling homeowners with negative equity through principal reduction; assist the unemployed or under-employed make their mortgage payments; facilitate the settlement of second liens; facilitate short sales and/or deeds-in-lieu of foreclosure; and assist in the payment of arrearages.
In March 2010, the Obama Administration announced a second round of Hardest Hit Fund aid totaling $600 million for five additional states with high areas of concentrated unemployment: North Carolina, Ohio, Oregon, Rhode Island, and South Carolina. The proposals that these states submitted are currently being reviewed.
For more information on the Hardest Hit Fund, visit:
Round I: http://www.whitehouse.gov/the-press-office/help-hardest-hit-housing-markets
Round II: http://www.ustreas.gov/press/releases/tg618.htm
