TALLAHASSEE, Fla. – June 16, 2010 – A state group has unveiled plans for divvying up $317 million in federal foreclosure relief to mortgage-challenged Floridians struggling with unemployment, underemployment or medical hardships.

The Florida Housing Finance Corp. will distribute the money to counties based on local home-value declines, unemployment rates and totals of seriously delinquent mortgages. South Florida counties are tops on the distribution list, followed by Orange County, which would get $23.7 million. The state hopes to help 12,000 households with its Mortgage Intervention Strategy.

Homeowners who qualify would get at least nine months of their mortgage, taxes and insurance paid for through the U.S. government’s Hardest Hit Fund program. Florida is one of five states that will share in $1.5 billion of the funds.

Following that mortgage hiatus, homeowners also may qualify for an average $25,000 reduction in the loan principal that they owe. The hope is that, once their income increases, they can get a further loan modification and resume making mortgage payments.

The money is considered a loan to be forgiven incrementally – 20 percent a year for five years. If the homeowner can no longer make mortgage payments and the home goes into foreclosure, the loan is likely to be wiped away, Westcott said.

To qualify for the relief, homeowners must apply to a local housing-counseling agency; such agencies are now in the process of seeking the housing-finance authority’s permission to screen applicants. Homeowners who are already in a loan modification are unlikely to qualify, officials said. And homeowners may need to sign affidavits stating that they are underemployed, for instance.

Westcott said the pilot program is likely to wind up in a hard-hit South Florida county, where the agency would test the program for two or three months before rolling it out statewide later this year.

Members of the Florida Housing Finance Corp. met Friday at the Peabody Orlando hotel with about four dozen housing-counseling agencies to introduce the program.

“We don’t want to help people who, through their own mismanagement, got themselves into the situation they are in, using their home as an ATM and taking out all the equity to buy themselves a boat. … We are not going to help the strategic defaulter,” said Nicole Gibson, federal loan-programs administrator for the corporation. “They don’t want their home anyway.”

Several of the housing counselors who attended the session questioned some aspects of the program, such as whether enough jobs would return to sustain the mortgages once homeowners have exhausted their funds.

“Unless people have some income, there’s still going to be a problem,” said Eddie Felton, executive director of the Home Ownership Center of Lee County. “A lot of those jobs aren’t coming back.”

The program is also open to criticism from homeowners who have been making their payments all along and who will question, Felton said, why the government isn’t helping them.

“Here it is: My tax dollars again are being given to people who aren’t worthy,” Felton said. “That’s the way it’s going to be perceived.”