While on a campaign stop for Senate Majority Leader Harry Reid, President Barack Obama is expected to announce today a new $1.5 billion initiative to help support homeowners in the five states hit hardest by the U.S. housing crisis.
President Obama plans to designate $1.5 billion from the Troubled Asset Relief Program to help fund programs at local Housing Finance Agencies in Michigan, Florida, Nevada, Arizona, and California since their housing markets are 20 percent or more from their peaks.
Obama's choice to make the announcement in Nevada was no coincidence since that state is one of the hardest hit states struggling from the nation's housing troubles.
An administration official did acknowledge that the $1.5 billion price tag was a small number compared to the overall scope of the housing problem.
Here is how the program is going to work. The $1.5 billion will be distributed to the state agencies based on which states are suffering more and may go to programs to help unemployed homeowners or borrowers who are considered underwater with their mortgage and owe more than their houses are worth.
The hope is that the fund will in effect amplify all the things that are currently working well for these states and to give license for more innovation. Each of the five states have strong HFA's that could absorb this money well.
The Treasury Department just recently began a $23 billion program for the Housing Finance Agencies in all 50 states.