In February of 2010, President Obama’s administration addressed the national “housing bubble” by creating the Housing Finance Agency Innovation Fund for the Hardest-Hit Housing Markets.

The intent of the fund is to allocate $1.5 billion in federal funding to aid distressed low and moderate-income homeowners who are falling behind on their mortgages and risk foreclosure.

The first round of funding went out to the HFAs in the states of California, Arizona, Florida, Michigan and Nevada, the hardest-hit states in the housing market crash and coincidentally, five of the states that top the list of most foreclosures reported in the first six months of 2010.

A second wave of funding was approved to the states of North Carolina, South Carolina Ohio, Oregon and Rhode Island.

State HFA’s issue untaxed state bonds to help first-time low-income buyers purchase single family homes under fixed low-rate 30 year mortgages, but many have cut or even suspended their programs since the housing crash began.

State HFAs are receiving the federal monies and accepting applications to qualified homeowners whose financial hardships, such as family disaster or unemployment, have put them at risk of foreclosure.

While the Obama administration feels these programs could stop the increasing rate of foreclosures across the country, (RealtyTrac recently reported about 1.65 million foreclosures for the first half of 2010) critics claim that the funding is just a temporary bandage to a significantly deflated market, and may even prolong the housing crisis.

Critics claim that after the aid is granted and runs out, the market will still be at bottom at an inflated market.  Some realtors believe until the market truly bottoms out and inflated loans are flushed out with short sale and foreclosures, the market will not be able to legitimately recover.

California’s CalHFA was recently approved for $700 million in federal funds for their Keep Your Home program, the details of which can be found at their web page if local homeowners would like to see if they qualify.

If your house is located in the Southern California and you would like a good Realtor in Glendale to handle your property, give us a call.