The U.S. Department of the Treasury has allocated a final $1 billion in funds for the Hardest Hit Fund (HHF), which was established in 2010 to aid the states that were hardest hit by the housing crisis in rebuilding their blighted neighborhoods.
The funds in this round will be distributed among 13 of the 19 states participating in the program – with Michigan receiving the most, at about $188 million.
The funds are allocated through a competitive application process. In order to qualify for funds in this phase, state housing finance agencies (HFAs) were required to 1) submit detailed applications that demonstrated an ongoing need for additional funding to prevent foreclosures and stabilize housing markets and 2) lay out a reasonable plan of action to address those needs and fully utilize the funds by Dec. 31, 2020, the Treasury says in a press release.
“Today’s announcement continues Treasury’s commitment to provide relief to struggling homeowners and help stabilize neighborhoods in hard-hit areas,” says Mark McArdle, treasury deputy assistant secretary for financial stability. “While the housing market continues to recover, we know some homeowners and areas are still experiencing the damaging effects of the housing crisis. With this additional funding, states will be equipped to continue their great work in getting critical resources to those most in need.”
This is the second phase of the $2 billion in additional funding authorized by Congress under the Consolidated Appropriations Act. The first phase, which was announced in February, allocated $1 billion among 18 of the 19 participating HHF states using a formula based on state population and the HFA’s to-date utilization of its existing HHF allocation.
In order to qualify for the first round of funding, states must have already used more than 50% of their previous HHF allocations. However, with this latest round of funding, states are allowed to still have more than 50% of their previous funding still in place.
According to the Treasury, there were several states that participated in the first round of funding but did not apply for the second round, including Alabama, Arizona, Florida, Nevada and South Carolina.
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