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$7.6 billion in funding for innovative measure to help families in states hit hardest by the foreclosure crisis has been made available by President Obama's Housing Finance Agency Innovation Fund for the Hardest Hit Markets. Ohio, through the Ohio Housing Finance Agency, has developed the Restoring Stability: A Save the Dream Ohio Initiative through this funding.

In February 2010, President Obama established the Hardest Hit Fund (HHF) to provide targeted aid to families in states hit hard by the economic and housing market downturn. Each state housing agency gathered public input to implement programs designed to meet the distinct challenges struggling homeowners in their state are facing.

In July 2010, the Ohio Housing Finance Agency (OHFA) submitted to the U.S. Treasury its proposal to use HHF funds to help homeowners experiencing financial hardship avoid preventable foreclosure. The $7.6 billion allocated to this initiative was awarded in four separate rounds of funding to 18 states and the District of Columbia. States were chosen either because they are struggling with unemployment rates at or above the national average, or steep home price declines greater than 20 percent since the housing market downturn. Ohio was included in three of those rounds and was awarded a total of over $570 million that will help an estimated 57,000 Ohio households.

The HHF program is an extension of the Troubled Asset Relief Program (TARP administered by the U.S. Department of Treasury under the Emergency Economic Stabilization Act of 2008 (EESA)). Treasury guidelines stipulated that to receive funds, each recipient of funding from HHF (each Eligible Entity) must be a "financial institution," as that term is defined in EESA. To fulfill this requirement, the Ohio Capital Corporation for Housing formed the Ohio Homeowner Assistance LLC (OHA), a wholly-owned subsidiary which serves as the Eligible Entity. OHA receives funds directly from Treasury and disburses all payments of HHF funds, including those to lenders/servicers and administrative expenses under the direction of OHFA.

Treasury approved five programs available to Ohio homeowners:

OHFA launched the Restoring Stability: A Save the Dream Ohio Initiative (previously referred to as Ohio Hardest Hit Fund) on September 27, 2010. Thousands of homeowners from all 88 counties in Ohio have applied for assistance and, as of mid-November 2011, over 3,500 homeowners have been awarded assistance.

OHA staff developed an in-house software system that includes a portal to accept payment requests directly from OHFA and which will electronically submit payment requests directly to KeyBank to send them via ACH to servicers.

Homeowners are able to apply for more than one program for a maximum award of $15,000. The homeowner then signs a no-interest, 5-year promissory note with OHA which will be forgiven over that 5-year period at 20% each year. The loan is repayable only if the homeowner vacates the property within the 5-year period and for the remaining balance since the most recent 20% write-off. Homeowners are able to apply either through the website at www.savethedream.ohio.gov or telephone at 888.404.4674 where they will be contacted by one of 40 housing agencies around the state who are trained to walk them through the process. Homeowners may also go directly to an approved housing counseling agency.

The most recent quarterly report submitted to the U.S. Department of Treasury by OHFA is available on the Restoring Stability website at www.ohiohome.org/restoringstability/reports.aspx. This site also provides more detailed information about the programs offered, a list of approved counseling agencies, and participating servicers.

These programs will be offered for 7 years, ending December 31, 2017, and remaining funds are returned to Treasury.

For complete information on Restoring Stability: A Save the Dream Ohio Initiative, visit the Ohio Housing Finance Agency website.