The U.S. Department of Treasury announced on Friday that it would provide up to $2 billion in additional Troubled Asset Relief Program (TARP) funds for the Hardest Hit Fund (HHF) program to put toward assisting struggling homeowners and stabilizing communities that were most affected by the foreclosure crisis.
Using the latest round of funding, participating state Housing Finance Agencies (HFAs) will be able to provide assistance for the hardest hit communities. This will be the fifth round of HHF funding. According to Treasury, the deadline for states receiving additional funding to utilize those funds is extended by three years; those states now have until December 31, 2020, to utilize the funds.
“Today’s announcement is the next step in the Administration’s effort to help struggling homeowners recover from the financial crisis, and strengthen the housing recovery,” said Treasury Secretary Jacob J. Lew. “Thanks to a bipartisan group of members of Congress who helped secure additional funding for the Hardest Hit Fund, we will be able to provide significant resources to hard hit states and target these critical resources towards programs that we know have helped Americans avoid foreclosure, and stabilized housing markets, including blight elimination programs.”
The new funding will be allocated in two phases of $1 billion each. In the first phase. $1 billion will be allocated according to a state’s population and according to how states have utilized their HHF funds. HFAs must have used at least 50 percent of their existing HHF allocation in order to qualify for the first phase of funding, and states that have demonstrated the ability to effectively deploy their HHF funds will receive priority consideration in the first phase.
All participating HFAs are eligible to apply to receive funds in the second phase of allocation. HFAs attempting to receive funds in the second phase of allocation are permitted to request either $250 million or 50 percent of their existing HHF allocation, whichever is lower, and they have until March 11, 2016, to submit their applications. HFAs that will receive consideration to receive funds in the second round of allocation are those that have significant ongoing needs as far as foreclosure prevention and neighborhood stabilization, a proven track record in utilizing funds, and successful program models to address those needs, according to Treasury. The recipients of the second phase of allocations will be announced in April.
“While the housing market has strengthened in recent years, there are still many homeowners and neighborhoods experiencing the negative effects of the financial crisis,” said Mark McArdle, Treasury’s Deputy Assistant Secretary of Financial Stability. “The additional HHF funds authorized by Congress will allow states to continue their efforts to stabilize local communities and help struggling families avoid foreclosure.”
The Hardest Hit Fund was created in 2010 to provide $7.6 billion in targeted aid to 18 states and the District of Columbia which were deemed to have been hit hardest by the financial crisis. As of Q3 2015, HHF has disbursed approximately $4.5 billion of the money obligated to the program and assisted almost a quarter of a million homeowners. Click here for a FAQ on the latest round of HHF funding, or click here to access the Treasury HHF page.