Obama plans $3b in aid to homeowners without jobs

By Alan Zibel
Associated Press / August 12, 2010

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WASHINGTON — The Obama administration is providing $3 billion to unemployed homeowners facing foreclosure in the nation’s toughest job markets.

The Treasury Department said yesterday it will send $2 billion to 17 states that have unemployment rates higher than the national average for a year. They will use the money for programs to aid unemployed homeowners. Some of those states have already designed such programs.

Another $1 billion will go to a new program being run by the Department of Housing and Urban Development.

It will provide homeowners with emergency zero-interest rate loans of up to $50,000 for up to two years.

The administration was required to launch the HUD emergency loan program by the financial regulatory bill signed by President Obama last month.

The Treasury is using money from the $700 billion Wall Street bailout to pay its share of the program. Officials said they will not know until next month how many people would be helped.

California will get the largest share of money for the Treasury program, at $476 million. Florida is in line for nearly $239 million. Illinois will receive $166 million, and Ohio will receive $149 million.

Among New England states, only Rhode Island qualifies for the money. It will receive $14 million.

Massachusetts, with a June jobless rate of 8.8 percent, has been more successful generating jobs than the nation as a whole, which suffered from 9.6 percent joblessness that month.

More than 40 percent, or about 530,000 homeowners, have fallen out of the Obama administration’s main effort to assist those facing foreclosure.