This does not happen often. Abut $500 million in unspent funds was returned to the U.S. Treasury.
The reason why all of the authorized money is usually spend is because the bureaucrats know that the budget will be cut next year if all of the money is not spent this year.
The money was half of a $1 billion boondoggle to help 30,000 home owners in 32 states pay their mortgages. As to why these home owners were to be helped and not millions of others was never made clear.
In five states — Utah, Iowa, Arkansas, Missouri and North Dakota— less than 10% of the expected number of homeowners received preliminary approvals. North Dakota’s allocation allowed for 43 borrowers to get help; just four got preliminary approvals.
New York state has 458 preliminary approvals — 17% of its maximum allocation for 2,633 loans. Its total will likely go up because a data transmission problem delayed some applications there, Sullivan says.
The program was too small to do anything to solve the housing crisis, assuming that spending government money can solve problems. The program was just one more way to feed government employees who administer programs.
The deficit stays high because the number of boondoggles stays high. “Free money” has plenty of takers. Somehow, not all of the takers took this money.