Washington, D.C.-Today, Congressman Heath Shuler (D-Waynesville) announced that the state of North Carolina will receive $120,874,221 to help homeowners struggling to pay their mortgages due to unemployment. North Carolina is one of 17 states, and the District of Columbia, selected to receive this additional assistance, due to higher than the national average unemployment rates.
“The economic recession has affected all of us in some way. Almost all of us know someone who has lost a job through no fault of their own and, as a result, has to make tough decisions about which bills to pay first,” said Rep. Shuler. “This funding will help ensure that families have the tools and resources to keep their homes until our economy fully recovers and our unemployment rate returns to normal levels. North Carolina clearly demonstrated a need for this funding, and I’m glad to see that we’re getting a significant portion of the total amount.”
Assistance will be provided through targeted foreclosure-prevention programs such as the Housing Finance Agency (HFA) Innovation Fund for the Hardest Hit Housing Markets (the “Hardest Hit Fund”) within the U.S. Department of the Treasury. Nationally, the Treasury is providing an additional $2 billion of assistance for HFA programs. The funds, under the discretion of the states, can be used for investments such as mortgage assistance or job training. In addition, the U.S. Department of Housing and Urban Development is planning to unveil a corresponding $1 billion Emergency Homeowners Loan Program which will provide up to 24 months of assistance to homeowners in jeopardy of foreclosure due to underemployment, unemployment, or a medical problem.
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BACKGROUND (from the U.S. Department of the Treasury):
Hardest Hit Fund
President Obama first announced the Hardest Hit Fund in February 2010 to allow states hit hard by the economic downturn flexibility in determining how to design and implement programs to meet the local challenges homeowners in their state are facing.
Under the additional assistance announced today, states eligible to receive support have all experienced an unemployment rate at or above the national average over the past 12 months. Each state will use the funds for targeted unemployment programs that provide temporary assistance to eligible homeowners to help them pay their mortgage while they seek re-employment, additional employment or undertake job training.
States 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 that, within established guidelines, meet the distinct needs of their state.
The states eligible to receive funds through this additional assistance, along with allocations based on their population sizes, are as follows:
Alabama $60,672,471
California $476,257,070
Florida $238,864,755
Georgia $126,650,987
Illinois $166,352,726
Indiana $82,762,859
Kentucky $55,588,050
Michigan $128,461,559
Mississippi $38,036,950
Nevada $34,056,581
New Jersey $112,200,638
North Carolina $120,874,221
Ohio $148,728,864
Oregon $49,294,215
Rhode Island $13,570,770
South Carolina $58,772,347
Tennessee $81,128,260
Washington, DC $7,726,678
HUD Emergency Homeowners Loan Program This new program will complement Treasury’s Hardest Hit Fund by providing assistance to homeowners in hard hit local areas that may not be included in the hardest hit target states.
Those areas are still being determined. The 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 with payments on their mortgage principal, interest, mortgage insurance, taxes and hazard insurance for up to 24 months. Under the program, eligible borrowers must:
- Be at least three months delinquent in their payments and have a reasonable likelihood of being able to resume repayment of their mortgage payments and related housing expenses within two years;
- Have a mortgage property that is the principal residence of the borrower, and eligible borrowers may not own a second home;
- Demonstrate a good payment record prior to the event that produced the reduction of income.
HUD will announce additional details, including the targeted communities and other program specifics when the program is officially launched in the coming weeks.