According to the Sacramento Bee, California is racing to spend nearly $2 billion in federal funding before it expires by loosening local lending rules and criteria.

“We never before recognized negative equity in and of itself as a hardship,” said Diane Richardson, head of Keep Your Home California. “We are now recognizing that if your loan-to-value ratio exceeds 140 percent, that is your hardship. It’s going to require lot less documentation from homeowners.”

Richardson said the agency does not have a solid estimate of how many homeowners might be helped by the changes. With home prices rising across the state, many properties have been lifted into positive equity. But in parts of the Central Valley and elsewhere, many people still remain badly upside-down on their mortgages.