Thousands of underwater borrowers in the Sunshine State may be able to get an injection of federal cash to pay down their mortgage balances.
The Florida Housing Finance Corp. announced Friday that it would use $350 million in federal funds to pay down the mortgages of up to 10,000 underwater homeowners, according to a Palm Beach Post report. The money is coming from the $1bn Florida received from the Hardest Hit Fund (HHF), a federal fund set up to help homeowners in the 18 states (plus the District of Columbia) affected most by the housing crisis.
The states themselves design programs to administer money received from the fund, according to the U.S. Treasury Department. For example, a North Carolina HHF program paid unemployed homeowners’ mortgages for up to 24 months (36 months in high-unemployment counties) while they were enrolled in continuing education programs or searching for work. Ohio and Rhode Island programs pay a portion of struggling homeowners’ monthly mortgage bills.
Homeowners eligible for the Florida program could get up to $50,000 to reduce the principal on their mortgages, according to an Associated Press report. To be eligible for the program, homeowners must be current on their payments and owe at least 125% of their home’s values on their mortgages. There’s also a $350,000 cap on the mortgage owed, according to the AP. Unlike previous Florida HHF programs, however, applicants don’t have to prove financial hardship to be eligible for the cash, according to the Palm Beach Post.
Florida officials say that up to 25,000 applications will be accepted initially, according to the AP. At least 200,000 borrowers in the state are underwater, the AP reported.