The U.S. Treasury has allocated $125 million to Arizona from the $1.5 billion HFA Hardest-Hit Fund. President Obama announced the creation of the Fund on February 19, 2010 to help state housing finance agencies (“HFAs”) develop innovative local strategies for foreclosure prevention. The U.S. Treasury capitalizes the fund pursuant to the Emergency Economic Stabilization Act of 2008. Arizona’s Department of Housing will administer the state’s share of the money.
Eligibility for Participation in HFA Hardest Hit Fund
States that experienced house price declines of more than 20% from the peak qualify for funding. In addition to Arizona, California, Nevada, Florida and Michigan will receive grants. The U.S. Treasury used a formula based on each state’s home price declines, unemployment rate, and number of delinquent mortgage loans to allocate the $1.5 billion among the five participating states.
Each participating state must submit its proposed program to the U.S. Treasury for review and approval before it can use its allocated funds. HFAs must design locally-focused plans that implement foreclosure prevention tools such as mortgage modifications, short sales, principal reductions and unemployment assistance. Arizona received approval of its plan on June 23, 2010.