The $3 billion will be divided among the District of Colombia and 17 states hit hardest by the housing crisis and high unemployment. The new cash infusion means the total cost of the program, intended to help the unemployed hold on to their homes, is now $4.1 billion.
"We remain committed to helping struggling homeowners, and this program will provide additional assistance to states hit hardest by unemployment," said Herb Allison, assistant secretary for financial stability at Treasury.
California gets the largest share with $476 million, while Florida will receive about $239 million; Illinois will get $166 million and Ohio will get $149 million. All four states have double-digit unemployment and have also been hit by the waves of foreclosures.
The administration's program is now without controversy.
Republicans have argued that it puts taxpayer money at risk, and the special inspector general for the $700 billion Troubled Asset Relief Program is auditing the program.
The nation's unemployment rate remains a political problem for Democrats and the White House. Jobs and the economy are the number one issue for voters, but business hiring is flat, and the unemployment rate may rise before the mid-term election in November.
The gloomy economy has added political pressure for the White House, which has called for more stimulus spending to spur on economic growth. Record budget deficits have hampered that effort by making it difficult to win funding from Congress.
Treasury will distribute $2 billion through the "Hardest Hit Fund" created earlier this year, while the Housing and Urban Development Department will create a new "Emergency Homeowners Loan Program" that will provide zero-interest loans of up to $50,000 for two years.
HUD is expected to announce additional details within the next few weeks, officials said.
Under the recently enacted financial regulatory reform legislation, the administration was required to start the programs. The administration has set aside a total of $50 billion from the TARP for housing-related programs.
Each state will use the funds for targeted unemployment programs that provide temporary assistance to eligible homeowners to help them pay their mortgage while they look for work.
To qualify for assistance, eligible borrowers must be at least three months delinquent in their payments and be able to resume repayment of their mortgage payments within two years; have a mortgage property that is the principal residence of the borrower; and show a good payment record prior to the loss or reduction of income.
Other states receiving money in order of amounts are: Michigan, $129 million; Georgia, $127 million; North Carolina, $121 million; New Jersey, $112 million; Indiana, $83 million; Tennessee, $81 million; Alabama, $61 million; South Carolina, $59 million; Kentucky, $56 million; Oregon, $49 million; Mississippi, $38 million; Nevada, $34 million; Rhode Island, $14 million; and Washington, D.C., $8 million.
-- Silla Brush contributed to this story.