The states which saw the worst home-price declines and unemployment during the Great Recession are speeding up their spending of federal government aid, according to the Treasury Department.
Under a three-year-old program designed to help their residents,18 states and the District of Columbia have spent about $1.7 billion of the $7.6 billion total money available in the “Hardest Hit Fund,” Bloomberg news reports. Last year at this time, the states had spent only $511 million of the money, which is part of the Troubled Asset Relief Program.
Treasury Assistant Treasury Secretary Timothy Massad told Bloomberg’s Clea Benson that it took a while to set up the programs. The aid ranges from loan modifications for troubled borrowers to blight removal in neighborhoods hit by foreclosures.
“It does take some time for people to create the administrative structures and the controls,” Massad said in a telephone interview with Bloomberg. “We did start to see the money going out the door fairly quickly, and now we’re seeing it accelerate because states have fine-tuned their programs.”
States use the money to provide aid unavailable under other federal programs, including reducing the balance on loans backed by Fannie Mae and Freddie Mac, Bloomberg reports. Through June 30, the Hardest Hit Funds have aided 126,858 homeowners, according to Treasury.
