Part of $1.5 Billion in housing aid is coming to Arizona. As of last Friday, President Barack Obama announced that five states that have been hit hardest with home foreclosures will split the $1.5 billion in a new federal program. In addition to Arizona, which has seen home prices drop 50 percent, California, Florida, Michigan, and Nevada will submit their own plans for funding through this program.
This effort behind this program is intended to help unemployed homeowners, borrowers who cannot sell because they owe more than their home is worth, and people with second mortgages on their homes. The $1.5 billion is part of the $700 billion Troubled Assets Relief Program (TARP) funds. The money will be awarded based on a state's unemployment rate as well as foreclosure rate. The funds will not be available until this summer. Michael Trailor, director of the Arizona Housing Department said, "The loan-modification program isn't working here as it should, and the president sees that."
The intent behind this extra funding is to slow down the foreclosure rate, as foreclosures damage home values, and are a critical factor in the current collapse of the housing market. There must be a slow down in the number of foreclosed homes in order to see any sort of housing recovery. This current housing market collapse has been ongoing for the last three years in Arizona. We definately could use some additional aid, as there are thousands of struggling homeowners each month going through foreclosure.
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