After the financial crisis in began in 2007, the federal government sought a way to help financially-troubled homeowners with their mortgages. In 2010, President Obama announced a plan to provide $1.5 billion in funding from the Troubled Asset Relief Program (“TARP”) to create the Hardest Hit Fund, providing relief to homeowners in the five states hit the hardest by the Great Recession. Since then, thirteen more states – including Kentucky – have been added to the roster, with several rounds of funding totaling $7.6 billion. In February, the U.S. Dept. of the Treasury announced that it would exercise its authority under TARP to allocate up to $2 billion for the Hardest Hit Fund to extend the program through December of 2020.

Hardest Hit Fund programs can vary from state to state, but they may include mortgage payment assistance, principal reduction, assistance with transitioning into more affordable housing, and down payment assistance efforts. Kentucky uses Hardest Hit Fund money to fund the Kentucky Unemployment Bridge Program, which will pay an unemployed homeowner’s entire mortgage payment for up to 18 months or $30,000, whichever comes first. This program is administered by the Kentucky Housing Corporation (“KHC”) through the Kentucky Homeownership Protection Center.

As of February 19, 2016, only $4.5 billion of the original $7.6 billion had been disbursed, according to the Treasury Dept.  The added $2 billion in funding is the Treasury Department’s fifth round of such funding, and will be distributed in two phases. The first phase includes $1 billion and has been allocated among 18 states that have spent more than 50% of their allotted Hardest Hit Fund amounts to date. The second phase of funding is expected to be announced in April, and any participating state Housing Finance Agency may apply for funds. Kentucky is already listed as a recipient during the first phase of the latest round of funding.