$1B Foreclosure Aid Program Ends With $568 Million Unspent

Source: Julie Schmit / The USA Today

The federal government will disburse just $432 million from a $1 billion program to help unemployed homeowners avoid foreclosure, a government official said Thursday.

The rest of the money will return to the U.S. Treasury because the Emergency Homeowners’ Loan Program has ended, and not enough people were approved in time to receive aid.

The funding provided forgivable loans up to $50,000 to temporarily help unemployed or underemployed people avoid foreclosure in 32 states and Puerto Rico.

Out of 100,000 applicants, 11,832 were conditionally approved for the program that the government initially said could help up to 30,000 people. Assistance will average $35,000 to $45,000 a homeowner, said Brian Sullivan, a spokesman for the Department of Housing and Urban Development.

The program’s failure to reach or process enough applicants in time is “sad and shameful,” says Lewis Finfer, executive director of the Massachusetts Communities Action Network. It worked to pass the legislation to make the program possible.

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