FHA Refinance Program Fund
In September of 2010, the Treasury Department committed $8 billion (plus $117 million in fees to Citigroup for providing a letter of credit for that amount) to its FHA Refinance program. The program is aimed at helping underwater homeowners refinance into mortgages with a reduced principal. See our description of the program for more info.
Entities in this category received subsidies through one of TARP’s housing programs and aren’t expected to return the money.
FHA Refinance Program Incentive Payments
In March 2013, Treasury extended the letter of credit facility to provide coverage for loans refinanced throughout the eligibility period, which had been extended to December 2014, but reduced the amount from $8 billion to $1 billion. Treasury believes this lower amount will be sufficient to accommodate any increased usage that could result through the close of the program. On March 31, 2015, the U.S. Department of the Treasury and Citibank, N.A. entered into Amendment No. 2 to the L/C Facility Agreement. Amendments included reducing the maximum amount of the L/C from $1 billion to $100 million; extending by approximately two years the term of the L/C and the period of time Treasury has to increase the L/C to cover new loans entered into the program; and modifying the structure of administrative fees associated with the facility.
So far, $20M has actually been disbursed: