Florida gets $418 million for distressed homeowners

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Florida was awarded $418 million of federal stimulus spending on Friday to help homeowners who are unemployed or who owe more on their mortgages than their homes are worth.

Treasury officials disclosed the funding for Florida and four other states hit hardest by unemployment and the housing foreclosure crisis.

Homeowners in South Florida are eagerly awaiting details of this program, which was announced by President Obama last month.

The awards come from a $1.5-billion Innovation Fund for the Hardest Hit Housing Markets.

Florida will get $418 million, California $700 million, Michigan $155 million, Arizona $125 million and Nevada $103 million.

The Florida Housing Finance Corporation, which will handle the program in the Sunshine State, must submit a plan to Treasury by April 16 to say how it intends to help the unemployed and "underwater" homeowners. The plan must be approved by federal officials.

That's when consumers will get a better idea of who will qualify, what form the aid will take and how to apply for it.

Treasury officials also released guidelines telling state agencies how they might use their allotments. Options include:

--Modifying mortgages or giving lenders an incentive to forgive a portion of loans to make payments affordable.

--Paying down part of a mortgage to make it possible to modify the rest of it.

--Making it easier to complete "short sales," in which homes are sold for less than the mortgage.

--Allowing owners to give up their deeds to avoid foreclosure.

--Aiding unemployed borrowers to help them avoid foreclosure.

--Giving incentives to lenders to reduce or modify second liens on mortgages.

The program must be limited to those who owe no more than $729,750. State agencies may choose to target low- and moderate-income borrowers.

More specific information will come from the Florida Housing Finance Corp., a state-funded agency, which promises to provide updates for consumers on its website: FloridaHousing.org.

Source: http://weblogs.sun-sentinel.com/news/politics/dcblog/2010/03/florida_gets_418_million_for_d_1.html