President Obama announced $2 billion in new funding for foreclosure prevention Wednesday. The money will be distributed through the Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets, and state allotments will vary according to population size.

With $476.3 million, California will receive the largest piece of the pie, but Florida’s chunk will be none too shabby. The $239 million in federal aid will go toward helping the newly unemployed avoid losing their homes by falling behind on mortgage payments.

According to a February press release detailing the original implementation of the Hardest Hit fund, money distributed will be used for “innovation to take steps to address difficult, locally-important challenges for the hardest-hit housing markets, including unemployed borrowers, underwater borrowers, and second liens.”

An Aug. 11 press release detailed the distribution of the latest round of funds:

President Obama first announced the Hardest Hit Fund in February 2010 to allow states hit hard by the economic downturn flexibility in determining how to design and implement programs to meet the local challenges homeowners in their state are facing.

Under the additional assistance announced today, states eligible to receive support have all experienced an unemployment rate at or above the national average over the past 12 months. Each state will use the funds for targeted unemployment programs that provide temporary assistance to eligible homeowners to help them pay their mortgage while they seek re-employment, additional employment or undertake job training.

An additional program, the Emergency Homeowners Loan Program, will assist those who may not be included in the Hardest Hit target states. According to a U.S. Department of Treasury press release, “The program will work through a variety of state and non-profit entities and will offer a declining balance, deferred payment ‘bridge loan’ (zero percent  interest, non-recourse, subordinate loan) for up to $50,000 to assist eligible borrowers with payments on their mortgage principal, interest, mortgage insurance, taxes and hazard insurance for up to 24 months.” In order to be eligible for the loan, borrowers must be at least three months behind on their payments, not own a second home and demonstrate a good payment record.

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