Home buyers may be able to benefit from a recent decision from Citigroup to use $25.7 billion of its TARP (Troubled Assets Relief Program) funds for residential mortgage lending. The bank recently unveiled a report detailing how it will be utilizing approximately $36.5 billion of the $45 billion received from the government last year.
According to Citigroup, after residential mortgage lending receives its share of the pot, there will be $10.8 billion to be distributed. The money will be used as follows: personal and business loans will receive $2.5 billion, student loans will receive $1 billion, credit card lending will receive $5.8 billion, and corporate loans will get the remaining $1.5 billion.
The reason for investing such a large portion of the TARP funds into the housing market, Citigroup says, is to repay American taxpayers. Making the large investment will give the bank an opportunity to show appreciation through giving back, that is, in addition to the $3.41 billion that it will be paying back to the government each year in dividends.
Citigroup says it hopes that by making these calculated contributions, it will be able to restore stability and liquidity to the capital markets and expand credit for both consumers and business which should, in turn, make some much-needed improvements to the U.S. economy.
