In February 2010, President Obama initiated the Hardest Hit Fund for homeowners struggling to pay mortgage bills in certain states after the housing crisis. While the program had assisted 94,000 families by December 2012, “We think the program can reach about 400,000 families,” says Andrea Risotti, spokesperson for the U.S. Department of Treasury.
The regions where residents can apply for Hardest Hit Fund assistances are Alabama, Arizona, California, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, Mississippi, Nevada, New Jersey, North Carolina, Ohio, Oregon, Rhode Island, South Carolina, Tennessee and the District of Columbia.
A total of $7.6 billion was divided amongst their local Housing Finance Agency to distribute to struggling homeowners based on local needs. Each HFA has until 2017 to spend all their funds, but Risotti says most of the states will probably be out of money by 2014. “If you’re struggling with your mortgage – especially if you recently lost your job – don’t wait,” Risotti says.
The federal program originally intended to support struggling homeowners. “We were seeing more and more homeowners struggling because of unemployment or because they were underwater on their loans,” Risotti says. Each HFA determines the specific eligibility criteria for local homeowners.
Rhode Island was the first state to use all their funds. “We spent all the money so we’re stopping the program at the end of the month January,” Faye Zuckerman, a spokesperson for Rhode Island’s HFA, says.
Still, real estate experts say other states are still not reaching the majority of local struggling homeowners – many don’t know the funds exist. Some groups, like the nonprofit Help Share the Word, are working to raise awareness. According to Risotti, they are not affiliated with the treasury or HFA in any way. “What they’re trying to do is just really educate homeowners about free resources for help, warn them against scams and encourage them more about the Hardest Hit Fund,” Risotti says.
Already there has been a tremendous growth in families applying for aid from the Hardest Hit Fund; in fact, there have been 27,000 applications since December.