The Obama administration on Wednesday nearly doubled to $4.1 billion the size of its foreclosure prevention program to help struggling homeowners hardest hit by falling home prices and rising unemployment.

Unemployed homeowners in 17 states and the District of Columbia could get as much as $2 billion under the program.

The money, which will not be available for at least several months, is in addition to an existing $1.5 billion program aimed at preventing foreclosures in five states hard-hit by slumping home prices and another $600 million for five states with high unemployment.

The Treasury announcement came just one day after the Federal Reserve said it was downgrading its U.S. economic outlook and pledged to provide additional support for the fragile economic recovery.

The administration is broadening the geographic areas eligible to receive the mortgage aid funds, which are part of its $50 billion housing assistance program, most of which has not been spent. No new money has been allocated.

The $50 billion Home Affordable Modification Program, itself part of the $700 billion bank rescue package approved by Congress in late 2008, has been widely criticized as ineffective.

Housing finance agencies in Alabama, California, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, Mississippi, Nevada, New Jersey, North Carolina, Ohio, Oregon, Rhode Island South Carolina, Tennessee and Washington, D.C., will be eligible for the funds announced Wednesday.

Nine of the areas were already eligible for aid under one or the other of the existing targeted programs. Only Arizona was not included in the expansion.

We remain committed to helping struggling homeowners and this program will provide additional assistance to states hardest hit by unemployment, said Herb Allison, Treasury assistant secretary for financial stability.

For details on the government program, see

(Editing by Jeffrey Benkoe)