WASHINGTON — Obama administration officials on Monday will detail plans to expand funding for a program to prevent foreclosures in states hit hardest by the housing crisis.
The program, known as the Housing Finance Agencies Innovation Fund for the Hardest Hit Housing Markets, will target five states with up to $600 million in funding, the Treasury said Monday ahead of a press conference on the subject.
This $600 million allocation will mark the second round of funds to be used in the HFA Hardest Hit Fund program. President Barack Obama first announced the HFA Hardest Hit Fund on Feb. 19, which provided a number of states with $1.5 billion.
The five states that will benefit from this second round of funding are: North Carolina, Ohio, Oregon, Rhode Island and South Carolina. Ohio will receive the most money with $172 million and North Carolina will get the second highest amount, $159 million. South Carolina, meanwhile, will get $138 million, Oregon will received $88 million and Rhode Island will see $43 million.
The Obama administration's announcement on the HFA Hardest Hit Fund program comes just a few days after the administration announced major expansions of several other foreclosure-prevention programs. Those beefed up programs aim to provide temporary relief to unemployed Americans by reducing their mortgage payments and to help homeowners with underwater mortgages refinance into government-backed loans.
The HFA Hardest Hit Fund program, meanwhile, provides assistance to states with the highest shares of their populations living in counties in which the unemployment rate exceeded 12% in 2009. The kinds of programs states can use the federal money for include unemployment programs, mortgage modifications, second lien reductions, principal reduction programs for borrowers with severe negative equity and programs that help with short-sales and deeds-in-lieu of foreclosure, among others.
The money to pay for the expansion of this program comes from the $700 billion Troubled Asset Relief Program, which Congress enacted as a response to the financial crisis.
Top Treasury officials, including Treasury Assistant Secretaries Herbert Allison, Michael S. Barr and Alan Krueger, will hold a press conference Monday afternoon to discuss the details.