The down payment proposal, which was rejected in a similar form by the U.S. Department of Treasury in 2010, is a strategic shift for the state’s Hardest Hit Fund
. Created with taxpayer money, the program has focused on staving off bank repossessions with mortgage assistance, principal reductions and payment of back loan debt.
The program has until 2017 to use up all of its funds. Florida Housing Finance Corp., which oversees the program, has already committed $573.5 million of the $1 billion, and hopes that the Treasury will be more open to the proposal this time around, according to The Real Deal.
The $7.6 billion Hardest Hit Fund has been allocated to 18 states, including Alabama, Arizona, California, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, Mississippi, Nevada, New Jersey, North Carolina, Ohio, Oregon, Rhode Island, South Carolina, Tennessee and the District of Columbia.
If the Treasury approves the proposal, Florida would be the first state to use the program’s funds to help purchase homes, instead of just keeping them. Those who meet the qualification would receive a $15,000 no-interest loan forgivable over five years.
Florida’s huge $1 billion foreclosure prevention plan has helped many homeowners stay in their homes, but a shift in tactics may assist homebuyers in getting one.