The program is now extended through December 2016
Chicago, IL (PRWEB) July 03, 2014
CF Funding is pleased to share that the Obama administration has announced the expansion of its affordable housing program. The program helps to support the construction of rental housing, and provides assistance to underwater homeowners in order to avoid foreclosures. The administration will be tapping into Treasury funds in order to support these programs. The Home Affordable Modification Program was set to expire at the end of 2015, but is now extended for another year. According to the Washington Post on June 26th in a release titled "Program to expand affordable rental options gets Treasury Dept. boost", the program has “reduced the payments of about 1.3 million homeowners, far short of its initial 4 million projection.”
The announcement was scheduled to coincide with the Making Home Affordable program’s 5thanniversary, as the program was introduced in 2009 (after the housing crash) as a means of stimulating the economy and improving the housing industry. As CF Funding has shared previously, the housing industry has come a long way since then. In CF Funding’s April 18th press release “Underwater Homes at Lowest Level in Two Years,” the lender shared news that foreclosures and shadow inventory are continuously decreasing, and that an increase in home values has allowed homeowners to regain equity. Increased equity has allowed many homeowners to refinance or invest in remodeling projects. However, more improvement is needed to reach peak levels of housing activity.
The program is now extended through December 2016, according to US Treasury Secretary Jack Lew. “We need to continue to be there for homeowners who are facing foreclosure, those who are struggling with increasing interest rates on their modified mortgages, and those whose homes are caught underwater,” Lew said. The program not only helps to construct affordable rental housing, but allows state housing finance agencies to underwrite multifamily FHA loans. In doing so, the finance agencies take on a risk, as they share any losses from those loans.
The new program will receive anywhere from 500 million dollars to 1 billion dollars in annual funds from the Treasury and the FHA, in comparison to 363 million dollars which the FHA provided to the program last year.
The administration also hopes to bring back the private sector in order to reduce the government’s role in the mortgage market. The market is currently dominated by Freddie Mac and Fannie Mae, which are government-owned mortgage firms. Lew said he has directed his team “to bring investors and securitizers together in the months ahead so we can uncover new paths to increase private investment.”
CF Funding will keep readers updated on mortgage and housing news on the lender’s blog at http://cffundingcorporation.blogspot.com .