The Obama administration has approved funding for five hard-hit states from a $1.5 billion bailout fund for borrowers.
The fund, dubbed the “hardest-hit fund,” was originally established in February.
Today, the U.S. Department of the Treasury said the administration approved the first round of funding for housing finance agencies in five states.
The states — Arizona, California, Florida, Michigan and Nevada — have reportedly seen a more than 20 percent decline in average home prices. The agencies all submitted proposals in April.
Nearly half of the funds — $700 million — will go to California. Another $418 million will go to Florida, while the other three states will each receive in excess of $100 million.
The funds will be used to reduce mortgage principal on negative-equity properties, provide assistance for unemployed or under-employed borrowers and help eliminate second liens. It will also be used to make up delinquent payments and facilitate short sales and deeds-in-lieu of foreclosure.
“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 statement said.
