The federal government says it will investigate a $1 billion state housing program designed to help homeowners avoid foreclosure.
U.S. Sen. Bill Nelson called for the audit last month, complaining that the Florida Hardest Hit Fund was poorly run and not reaching enough people.
"We share in your desire to bring more transparency to [the program] and note the importance of your concerns," Special Inspector General Christy L. Romero wrote to Nelson in a letter he released Thursday.
"This is good news for the people of Florida," Nelson, D-Fla., said in a statement. "It's a crucial step toward getting some of the financially strapped homeowners in our state more access to the help that should be readily available to them."
The state fund was established as part of a national Troubled Asset Relief Program to help homeowners hurt by the housing bust and recession.
As of March 1, 9,052 of the nearly 24,000 processed applications had been approved for financial assistance. Nearly half the applicants -- roughly 20,000 statewide -- were still waiting for word on whether they qualified.
The Florida Housing Finance Corp. administers Hardest Hit. In a letter last month to Nelson, Stephen Auger, the agency's executive director, wrote that "we have taken very seriously the proper management and administration of this program since it was first announced in February 2010."
He said the fund has been reviewed by the U.S. Department of Treasury and two state agencies, which found no problems.
Florida Housing officials could not be reached for comment Thursday.
More than 6,000 of the 44,854 total applications have come from Broward, the most of any county. Palm Beach County had 3,566 applications.
In asking for an investigation, Nelson cited a report in The Tampa Bay Times that only 18 percent of Floridians who applied to Hardest Hit by the end of last year had received help. That's the lowest percentage of the 18 states using $7.6 billion in federal money to aid homeowners, according to the report.
A spokesman for Romero declined to provide details of the investigation.
Her office previously conducted an audit of the various state foreclosure-aid programs, saying the Treasury did not put enough pressure on lenders to reduce mortgage balances of homeowners who owe more than their properties are worth.
Florida Housing said Hardest Hit was meant for unemployed or underemployed homeowners, but some complained that the program was too restrictive. Last spring, the agency announced changes that increased the amounts of money for mortgage payments and eased eligibility standards.
Homeowners can receive as much as $24,000 to cover their mortgages for 12 months. That's up from $12,000. They also may be eligible for as much as $18,000 to bring past-due mortgages current.
In addition, the program provides a one-time payment to qualifying homeowners of as much as $25,000, up from $6,000. Payments are made directly to the lenders.
Homeowners can apply for the program at flhardesthithelp.org.
Florida Housing has said it is in the process of creating another program -- a $50 million pilot that would reduce the balances of 2,000 "underwater" mortgages.
The worst of the foreclosure crisis has passed, although Florida remains one of the leading states for troubled homeowners.
The Sunshine State had the nation's highest foreclosure rate for six consecutive months until being surpassed by Nevada in March, RealtyTrac, a listing and research firm, said Thursday.
The South Florida metro area, which includes Palm Beach, Broward and Miami-Dade counties, had the highest foreclosure rate in the country for the first three months of 2013.
"We still have a tremendous amount of distressed property yet to be ... absorbed into the marketplace," said Jack McCabe, a housing analyst in Deerfield Beach.
powers@tribune.com, 561-243-6529 or Twitter @paulowers ___
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