Treasury Announces Process for Awarding Additional Hardest Hit Funding
Earlier today, the U.S. Department of Treasury announced how it will award the additional $2 billion in Hardest Hit Fund (HHF) program funding Congress recently appropriated in the Consolidated Appropriations Act for FY 2016. As Congress directed, eligibility for the new funds is restricted to the 19 states Treasury previously selected for HHF. Treasury’s announcement includes a list of the HHF states receiving additional amounts and the amounts they will receive.
Treasury plans to award the additional funding through two separate phases. In the first phase, Treasury will divvy up $1 billion through a formula based on each eligible state’s population and the amount of its initial HHF allocation that is has currently obligated. To be eligible for funding in this phase, an HFA must have drawn down at least 50 percent of its initial HHF funding.
In the second phase, Treasury will award the remaining $1 billion through an application process in which Treasury will consider each applicant’s housing needs, proven track record of utilizing HHF funds, and ability to design and execute effective programs. All HFAs participating in HHF will be eligible to apply for funding in this phase and may request an amount up to the lower of either 50 percent of their existing HHF allocation or $250 million. The deadline to apply for the additional funding under the second phase is March 11.
Treasury also announced that states receiving additional HHF funds will have until December 31, 2020 to use them, an extension from the current program end date of December 31, 2017. The new HHF funding will also be subject to “use or lose” provisions whereby HFAs that have not allocated a certain percentage of their HHF allocation by a certain date will be forced to send a percentage of their new allocation back to Treasury. Treasury will redistribute any returned funds to other HFAs participating in the program.
Through September 2015, HFAs have disbursed $4.5 billion in HHF funding to provide assistance to nearly 250,000 homeowners and help remove around 7,000 properties in blighted neighborhoods.
Treasury also released an FAQ document on the new funding and application process.