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State reopening Hardest Hit Fund to help underwater homeowners

Are you current on your mortgage payments but owe more than your house is worth?

At 9 a.m. Thursday, Florida housing officials will reopen a federally funded program that pays down loan balances by up to $50,000.

To qualify, the home must be a primary residence purchased before January 2010 and have an unpaid first mortgage balance not greater than $350,000. Total household income for a family of four cannot exceed 140 percent of the average median income for an area — $80,360 in Hills­borough, Pinellas, Pasco and Hernando counties.

Homeowners must also owe at least 125 percent of the property's current market value.

Reopening the $350 million Hardest Hit Fund Principal Reduction Program gives Floridians a second shot at a program that was first announced in September but closed a few days later when the number of applications hit a 25,000 cap.

Unlike last time, there is no automatic cutoff for applications, Cecka Rose Green, communications director of the Florida Housing Finance Corp., said at a news conference Tuesday.

However, she stressed that homeowners who applied in September should not reapply even if they were initially rejected or are still waiting to hear. Instead, they should contact the adviser they were working with.

The application website, which will become active Thursday, is principalreductionflhhf.org. Homeowners will also be able to call toll-free 1-877-863-5244.

For help in determining eligibility, the site will include a chart showing median average incomes for all Florida counties as well as a list of mortgage servicers that are and are not participating.

Since September, the program has spent $102 million to help 2,400 homeowners; more than 6,000 have been rejected.

Florida Housing Finance officials denied that the decision to reopen the program now was prompted by the Tampa Bay Times questioning how the housing agency has used Hardest Hit funds to reduce loan balances.

As the paper reported Tuesday, the agency recently expanded another principal reduction program that benefits people who have stopped paying their mortgages. So far that program has helped only nine homeowners yet has tied up $50 million in Hardest Hit funds.

Steve Auger, Florida Housing Finance's executive director, said the agency had been "watching trend lines" since March and realized that the main principal reduction program unveiled in September would not use all of the $350 million allotted to it.

"So at that point we began planning to reopen this," he said.

Auger said the housing agency had not considered revising income requirements to make more homeowners eligible for principal reduction. He also said the office of Gov. Rick Scott — a critic of federal stimulus programs — didn't tell the agency not to loosen requirements.

"No, we're not being advised by that, not at all," Auger said in response to a question.

The $7.6 billion federal Hardest Hit fund was created in 2010 to help 18 states with high foreclosure rates. Critics say the housing agency, which is in charge of Florida's $1 billion share, has been slow to get the money out to needy homeowners.

Since 2010, the agency has used about $480 million on five different mortgage-assistance programs and has until 2017 to spend the rest.

Susan Taylor Martin can be reached at susan@tampabay.com.

State reopening Hardest Hit Fund to help underwater homeowners 05/13/14 [Last modified: Tuesday, May 13, 2014 6:40pm]
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