• Treasury Announces Additional Funding for Two Targeted Foreclosure-Prevention Programs
  • August 24, 2010
  • Law Firm: Alston Bird LLP - Atlanta Office
  • Today, the U.S. Department of the Treasury (Treasury) announced additional funding for two programs designed to help homeowners in need: (i) the Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets (the Hardest Hit Fund), a program announced in February of this year and (ii) the Emergency Homeowners Loan Program, a complementary program soon to be established through the U.S. Department of Housing and Urban Development (HUD). Treasury plans to allocate an additional $2 billion to the Hardest Hit Fund and $1 billion to the Emergency Homeowners Loan Program. According to Bill Apgar, HUD Senior Advisor for Mortgage Finance, “[t]ogether, these initiatives represent a combined $3 billion investment that will ultimately impact a broad group of struggling borrowers across the country and in doing so further contribute to the Administration's efforts to stabilize housing markets and communities across the country.”

    According to Treasury, “[s]tates that have already benefited from previously announced assistance under the Hardest Hit Fund may use these additional resources to support the unemployment programs previously approved by Treasury or they may opt to implement a new unemployment program. States that do not currently have Hardest Hit Fund unemployment programs must submit proposals to Treasury by September 1, 2010 ....”

    With respect to the Emergency Homeowners Loan Program, Treasury stated that “[t]he program will work through a variety of state and non-profit entities and will offer a declining balance, deferred payment ‘bridge loan’ (zero percent interest, non-recourse, subordinate loan) for up to $50,000 to assist eligible borrowers ¿ for up to 24 months.” Treasury also noted that “HUD will announce additional details, including the targeted communities and other program specifics when the program is officially launched in the coming weeks.”