The US Treasury Department will expand the Hardest Hit Fund for state Housing Finance Agencies (HFAs) by allocating $600m to five additional states.
The Treasury launched the initial $1.5bn through the fund to prevent foreclosures and stabilize local housing markets where prices have dropped at least 20% from their peak. California, Florida, Arizona, Michigan and Nevada are each working on plans to fund principal-forgiveness, unemployment and second-lien reduction programs.
The second issuance of $600m will go to states with high concentrations of people living in economically distressed counties where unemployment reached at least 12% in 2009. The five states qualifying for the new fund are North Carolina, Ohio, Oregon, Rhode Island and South Carolina.
According to the Treasury, less than 15% of the US population lives in counties with such high unemployment levels.
Ohio will receive $172m from the fund. North Carolina will receive $159m. South Carolina will get $138m. Oregon was granted $88m, and Rhode Island will receive $43m.
The new program is set to provide assistance for the unemployed distressed borrower, helping them prevent foreclosure. It will also help fund modifications for mortgage loans held by the HFAs or other financial institutions, and programs that include principal reductions for first and second liens, short sales and deeds-in-lieu of foreclosure.
And having missed out on the first round of funding, states granted assistance this time around are already getting started.
“We are looking forward to working with our partners to develop a plan for the State of Ohio that ensures every dollar of this funding benefits troubled homeowners,” said the executive director of the Ohio Housing Finance Agency, Doug Garver. ”These funds have been allocated at a critical time in the state’s history, and it is fundamental that we keep unemployed and underemployed Ohioans in their homes.”
In addition to reviewing the guidelines surrounding the distribution of new federal funding, OHFA will administer the funds to help Ohio’s homeowners.
Write to Jon Prior.
Additional reporting by Jacob Gaffney
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