The Obama Administration Adds $3 billion For Homeowners
While the housing market continues to decline in Q2, some homeowners may be able to breathe a small sigh of relief. Announced earlier this week, the Obama administration will allocate an additional $3 billion towards the Housing Finance Agency’s ‘Hardest Hit Fund’ to help struggling homeowners with mortgages in negative equity.
Negative equity, also referred to as being ‘underwater,’ is categorized as a owing more on one’s mortgage than what their home is worth. According to the latest Zillow Real Estate Market Reports, single-family homes in negative equity has fallen to 21.5 percent in the second quarter from 23.3 percent in the first quarter. And while that is positive news, Zillow.com Chief Economist Dr. Stan Humphries remains guarded.
“While fewer homeowners were underwater in the second quarter than the first, it is not yet time to break out the champagne bottle,” Humphries said.
According to the Associated Press, in an effort to relieve the nation of feeling the pressures of debt and unemployment (which is hovering near 10% nationally) in some of the nation’s hardest hit markets, the Treasury Department is contributing $2 billion to Housing Finance Agency programs in addition to a complementary $1 billion Emergency Homeowner Loan Program sponsored by the Department of Housing and Urban Development.
Harold Simon of the National Housing Institute tells the International Business Times that he believes these contributions are a step in the right direction. “Three billion dollars is a lot of money. It’s not enough. I wish it was five times as much. But it will certainly help keep more people in their homes,” Simon says. “Anything that can be done in these current circumstances to help keep working families in their homes is worthwhile.”