The administration announced a new initiative to help the nation's hardest hit housing markets. President Obama has allocated $1.5 billion in aid for states where unemployment is high and home prices have fallen more than 20 percent in the aftermath of the housing bubble.
The president is setting up an "innovation fund" for state housing agencies to develop assistance programs for underwater, as well as unemployed homeowners in their communities. There will be a formula for allocating funding among eligible states based on home price declines and unemployment rates.
According to House Speaker Nancy Pelosi, the money will go to support homeowners in California, Nevada, Arizona, Florida, and Michigan. The Treasury must approve each Housing Finance Agency's (HFA) program design, which can include direct assistance for the unemployed and borrowers who owe more than their home is worth, as well as programs that address the challenges of second liens. The Treasury is expected to announce maximum state level allocations in the next two weeks, along with rules governing the submission of program designs by HFAs.
Source: DSNEWS.com, Carrie Bay, (02/19/2010)
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