Florida's $418 million program, estimated to help 12,000 Floridians, specifically claims that it is designed to help those who are struggling to make ends meet because of "hardships due to circumstances beyond their control."
Those who qualify include those who have lost their jobs or pensions without blame, or had to repair uninsured damage that made their home uninhabitable.
Arizona's $125 million program, meant to help about 4,000 residents, excludes homeowners who took out home equity loans or those who can't even afford their mortgage at today's depressed prices.
"This is anything but a government handout for undeserving homeowners," says Reginald Givens, the Neighborhood Stabilization Program Coordinator at the Arizona Department of Housing. "We've been designing the program to ensure that eligible consumers have not been irresponsible in their borrowing."
The Treasury is reviewing proposals submitted by the first round of states and is expected to approve them by June 1. Once they have been approved, funds are likely to become available by early July.
Eligible states were chosen based on hardship. The first round of funds, $1.5 billion, was earmarked for states whose home prices had fallen more than 20 percent: Arizona, California, Florida, Michigan and Nevada.
The program was later expanded with $600 million allocated to states with large populations facing an unemployment rate above 12 percent: North Carolina, Ohio, Oregon, Rhode Island and South Carolina.