The federal goverment gave 5 states the go ahead to start using funds from the “Hardest Hit Fund”. Nevada’s state housing finance agency (HFA) will be allotted $102.8 million dollars.
There are four primary elements to the Nevada Plan.
1. Mortgage modification with principal reductions and some forebearance. The prinicipal reduciton component will be in the form of an earned forgiveness loan. It is anticipated that 55%-60% of the programs funds will be expended on this program element.
2. Second mortgage plan aimed at assisting borrowers who have a second lien interfereing with either a short sale or modification of the first mortgage. Approximately 20% of the program funds will be allocated to this option.
3. Foreclosure mitigation capacity building. This program will expand the capacity of HUD approved housing counseling agencies and allow them to increase “intake” capacity.
4. Short sale faciliation-aid to the unemployed. The Nevada plan calls for incentives to financial institutions designed to expedite the short-sale decision making and closing process. The plan will allocate approximately 11.5% of the available funds to this part of the plan.
This fund was established by the Obama Administration in February 2010 to provide targeted aid to families in the hardest hit states of Nevada, Arizona, California, Florida and Michigan. The total alloted to these 5 states is $1.5 billion.
If you are interested in reading the entire NEVADA PLAN please feel free to contact me and I can forward it to you.