Menendez, Booker Announce $69M in Federal ‘Hardest Hit’ Funding to Address NJ Foreclosure Crisis

Menendez, Booker Announce $69M in Federal ‘Hardest Hit’ Funding to Address NJ Foreclosure Crisis

State can apply for additional $150M to help struggling homeowners

WASHINGTON, DC – U.S. Senators Robert Menendez and Cory Booker today announced the awarding of $69,231,301 from the U.S. Treasury’s Hardest Hit Fund (HHF) to assist financially-stressed New Jersey homeowners with mortgage modifications and refinancing to avert foreclosure and stay in their homes. In 2015, New Jersey had the nation’s highest foreclosure rate.

“It’s important to do everything we can to help struggling homeowners who are underwater and facing foreclosure stay in their homes, keep families together and strengthen neighborhoods,” said Sen. Menendez, the Ranking Member of the Housing Subcommittee. “This is critical funding to help address New Jersey’s worst-in-the-nation foreclosure crisis. Hardest Hit Funds are what we call ‘use-it-or-lose-it’ dollars—meaning the State has to demonstrate the continued need by effectively allocating the resources. Unfortunately, too many New Jersey families and communities are still reeling from the Great Recession, and I will continue to fight for them.”

"The financial crisis hit New Jersey particularly hard, forcing many homeowners to make difficult decisions as they still struggle to stay in their homes,” said Sen. Booker. “As New Jersey continues to grapple with the highest foreclosure rate in the nation, these federal funds will help stabilize our communities and most importantly keep families in their homes.”

The funding will allow state Housing Finance Agencies (HFAs) to continue assisting struggling homeowners and support locally-tailored programs designed to prevent foreclosure and stabilize state housing markets. These programs can include mortgage payment assistance for unemployed homeowners, principal reductions to help homeowners get into more affordable mortgages, and funding to pay-off second mortgages.

The HHF was created in 2010 to provide $7.6 billion in targeted aid to 18 states, including New Jersey, and the District of Columbia deemed hardest hit by the economic and housing market downturn. The program was designed to leverage the expertise of state and local partners by funding locally-tailored foreclosure prevention and neighborhood stabilization solutions. As of the end of the third quarter of 2015, HHF has disbursed approximately $4.5 billion of the $7.6 billion obligated to the program, on behalf of homeowners and stabilization efforts, and assisted nearly a quarter of a million homeowners.

The funding being awarded to New Jersey is from the $1 billion first phase of the fifth round of HHF funding Treasury announced last week and would be allocated from the Troubled Asset Relief Program (TARP), using a formula based on state population and the HFA’s utilization of their existing HHF allocation to date.

New Jersey is also eligible to apply for an additional $150 million, 50 percent of its existing HHF allocation, during the $1 billion second phase application process, which concludes March 11. This phase will allow Treasury to focus additional resources on HFAs that have significant ongoing foreclosure prevention and neighborhood stabilization needs, a proven track record in utilizing funds, and successful program models to address those needs. Treasury anticipates announcing the second phase allocations by the end of April. States receiving additional funds will have until December 31, 2020 to utilize their HHF funds.