Florida to put $350M toward helping underwater borrowers

The Florida Housing Finance Corp. will use $350 million in federal funds to pay down loan amounts for underwater borrowers. The first-come, first-served program kicks off Wednesday morning and is expected to help 10,000 homeowners initially, with the possibility of an expansion in the future.

To be eligible for the program – which is known as principle reduction – borrowers must be current on their mortgage payments, U.S. citizens and Florida residents, have the home be their primary residence and owe 25 percent or more on their mortgage than the home’s value. The borrowers do not need to prove financial hardship to be eligible, the Palm Beach Post reported.

The $350 million federal funding is being taken from $1 billion in federal aid that Florida received through the Hardest Hit Fund pool. [Palm Beach Post]  – Hiten Samtani