Some of the states hit hardest by the slump in housing prices will be able to tap into a special $1.5-billion fund on Wednesday that is intended to head off some foreclosures.
The Treasury Department said state housing agencies in Arizona, California, Florida, Michigan and Nevada can use money from a so-called Hardest Hit Fund for foreclosure mitigation that was announced in February,
Each of the states that will get money on Wednesday as part of a first round of funding suffered a decline of 20 percent or more in average housing prices.
Some of the programs that states proposed will try to assist homeowners who are facing negative equity by reducing the principal of loans that they owe. Others will help unemployed or under-employed people keep up their mortgage payments or will be used to finance short sales of homes to avoid foreclosure.
Arizona will get $125.1 million for these purposes while California gets $699.6 million and Florida $418 million. Michigan will receive $154.5 million of funding and Nevada gets $102.8 million.
(Reporting by Glenn Somerville, Editing by Chizu Nomiyama)