Five states hardest hit by the foreclosure crisis have been given only weeks to plan how to spend $1.5 billion in federal funding announced by the Obama administration last month.Guidelines issued under the U.S. Treasury Department's Fund for Hardest Hit Housing Markets on March 5 gave housing finance agencies in California, Arizona, Florida, Nevada and Michigan just six weeks to come up with plans on how to spend their share of the money.
The rush could be problematic for the states, especially because Treasury is seeking "innovative" measures to help families facing foreclosure. But some experts have been urging the administration to try the approach, believing it will be helpful and that it can be done quickly.
The guidelines give wide leeway to the state Housing Finance Agencies charged with doling out the money to design programs tailored to their region's circumstance. The money can be spent, for example, to help families who can't pay their mortgages because of job losses, unable to refinance because plunging home values have left them "underwater," or to give relief from second mortgage payments.
Florida is getting the second-largest share at $418 million.
The Florida Housing Finance Corporation is just starting to review the Treasury requirements, but has put a team together and is reviewing programs other agencies are using. They're looking at plans that have helped in other states and will likely cherry-pick the best.
Some critics have called the $1.5 billion both too little and too much — too little, because the housing crisis has hit so many homeowners that $1.5 billion is tiny compared to the need, and too much because it targets homeowners who really can't afford to be in their home anyway.
http://www.sun-sentinel.com/business/realestate/az--hardest-hit-funding-20100314,0,3824196.story
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