The US government has allocated a US$600 million “Hardest Hit Fund” intended to help some 50,000 stressed homeowners in five states with high jobless rates.
Housing agencies in the US states of Rhode Island, Oregon, South Carolina, North Carolina and Ohio can spend the money for foreclosure mitigation that was announced in March, a top US Treasury official said in an interview with Reuters.
Herb Allison, assistant secretary for financial stability in the US Treasury Department, said that the proposals of each of the five states have been approved, and they will be receiving the funds to help homeowners prevent home foreclosures, but “the funds will start flowing in the next several months, state by state”.
The five US states that will receive federal aid had an unemployment rate of more than 12 percent last year. Mr. Allison noted that the programme was not designed to prevent all foreclosures throughout the US, but it will only be given to those who need it most.
“For the people who are going to be helped by this, it will make a very meaningful difference,” he said, adding that average homeowner will receive US$10,000 during the duration of the programme, which will end two months after the next national election.
In February, President Obama announced a US$1.5 billion “Hardest Hit Fund” for the states of Michigan, Florida, Arizona, Nevada and California, where housing prices fell to the lowest level.