Hardest Hit Foreclosure Initiative

In the wake of the nation’s worst economic crisis since the Great Depression, the federal government enlisted state HFAs’ help in solving some of the nation’s toughest housing problems. On February 19, 2010, President Barack Obama announced the creation of the Hardest Hit Fund (HHF), a plan to provide $1.5 billion in funds from the Troubled Asset Relief Program (TARP) to state HFAs in the five states (Arizona, California, Florida, Michigan, and Nevada) hardest hit by unemployment and foreclosure to help them administer new foreclosure prevention programs.

This initiative was expanded to include 13 additional jurisdictions that had sustained unemployment rates at or above the national average over the past year through June 2012. Participating agencies include the original five states as well as Alabama, District of Columbia, Georgia Illinois, Indiana, Kentucky, Mississippi, New Jersey, North Carolina, Ohio, Oregon, Rhode Island, South Carolina, and Tennessee.

HFAs utilized the Hardest Hit Fund in a variety of ways to help homeowners avoid foreclosure. Treasury took a flexible approach to this program that allowed HFAs to tailor their individual homeowner assistance initiatives to best fit the needs of their states. Some HFAs received permission to use HHF funding to remove blight in troubled neighborhoods.

Recognizing the program’s success, Congress at the end of 2015 extended HHF for three more years, from 2017 to 2020, and appropriated an additional $2 billion for the program. All total, Congress and the Administration have committed $9.6 billion through 2020 to help participating HFAs aid struggling homeowners.

HHF has also played a role in state responses to the COVID-19 pandemic. In early 2020, several HFAs, some of whom had previously shut down or were in the process of winding down their HHF mortgage assistance programs, reopened their programs to help struggling homeowners who had been financially impacted by the pandemic. The overall success of the HHF program also helped prompt Congress to include in the American Rescue Plan Act nearly ten billion dollars for homeowner aid through the Homeowner Assistance Fund (HAF), which HFAs will be administering in most states.

Through 2020, HFAs assisted more than 415,000 homeowners through a number of different HHF-funded programs, including principal reduction, down payment assistance, mortgage payment assistance, and transition assistance. The program has also supported the demolition of more than 45,000 blighted homes, helping to stabilize property values and restore troubled neighborhoods. According to an independent evaluation updated in 2021, HHF saved housing finance industry participants nearly $8 billion.

More information about the Hardest Hit Fund program is available on Treasury’s website.