Washington…The Obama administration announced Wednesday that as part of an ongoing effort to stabilize housing markets it will send a $3 billion lifeline to jobless homeowners struggling to make mortgage payments. Tapping into resources from the $700 billion Wall Street bailout, the Treasury Department will add $2 billion to its existing "Hardest Hit Fund," assisting the 17 states that have unemployment rates higher than the national average, along with Washington D.C.
A new $1 billion program led by the Department of Housing and Urban Development will give homeowners who are at risk of foreclosure due to involuntary unemployment, underemployment, or a medical condition interest-free loans for as much as $50,000 for up to two years.
The two programs "will ultimately impact a broad group of struggling borrowers across the country and in doing so further contribute to the administration's efforts to stabilize housing markets and communities across the country," Bill Apgar, HUD Senior Advisor for Mortgage Finance, said in a statement.
Officials said they will not have an estimate of how many people will benefit from the programs until next month.
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