The original Hardest Hit Fund, announced by the Obama administration in February 2010 to ease the housing crisis, included five of the "hardest hit" states. The expansion of the fund in March added five more states. On Wednesday, August 11, the US Treasury Department started the next round of help and added seven more states to the "hardest hit" list.
FIVE...THEN TEN
February's funding ($1.5 billion) was earmarked for five states in crisis - Arizona, California, Florida, Michigan, and Nevada. The second round in March ($600 million) was designed to help North Carolina, Ohio, Oregon, Rhode Island, and South Carolina.
MORE THAN TEN
Last week's additional $2 billion extended the aid to Alabama, Illinois, Kentucky, Mississippi, and New Jersey, as well as the District of Columbia. The amount of money given to each state depends on its population.
UNEMPLOYED OR UNDEREMPLOYED
The recipients of the benefits will be unemployed or underemployed home owners who cannot afford their mortgages. The money comes from the Troubled Assets Relief Program (part of the Making Home Affordable Program). Whether you agree with this approach or not, it is hard to deny the need.
CRISIS
Obviously, the crisis is fueled by the same turmoil which was the inspiration for the 'Zero Down' program or the Federal Home Buyers' Tax Credit. The aid might be dressed in different packages and address slightly different angles. Yet when you get right down to the basics, all these measures are meant to raise everyone out of the economic slump. Although many people are finding their way back, some individuals and families are still in crisis. Unemployment is the cause of much of the distress out there.
DIFFERENCE
Last week's 'Hardest-Hit Fund' is slightly different from the original assistance. This recent $2 billion in funding can be used only to help with mortgage payments for "the unemployed or underemployed" home owner. With the February funding, money was given to state housing agencies and they could design individual programs (such as foreclosure prevention programs and similar initiatives) to help their markets.
NEED
The administration believes that there is an urgent and immediate need for this latest program. California though has yet to use the first part of its funding ($700 million) but the state has now received an additional $476 million. Of course, California did come up with a plan – four new programs – from the February funding. The plan has just not gone into operation to date.
NEED FOR FAIRNESS
Besides California's unemployed home owners who are waiting for the program, people in other states are facing similar challenges. As a whole, these states did not qualify in the 'top 17' but that does little to help these unemployed individuals. Actually though, there is supposed to be a $1 billion program under development to help in the other states. The program is expected to be released under the U.S. Department of Housing and Urban Development.
If this program does not come to life, we are left with an odd scenario. Two people are facing the same challenge and one gets help and one doesn't - because of their location. Within any system, the perception of being fair is as important as fairness itself.
What Do You Think About The Expansion Of The "Hardest Hit Fund?"