Florida’s key foreclosure prevention program has turned its sights on seriously underwater homeowners, offering up to $50,000 to pay down mortgage debt and help regain equity in the state’s still mending real estate market.

Announced Friday, the new plan differs from many previous foreclosure lifelines in that people do not have to prove a financial hardship.

But it’s no blind giveaway either. Eligible borrowers must be current on their loan payments, have mortgage debt less than $350,000, and can’t earn more than 40 percent over the median family income for their area. A borrower must also owe 25 percent or more on their mortgage than the home’s value.

The Florida Housing Finance Corp.’s board of directors approved $350 million for the principal reduction program. Officials estimate average payments will be $35,000 each, reaching about 10,000 borrowers.

Consumer advocates point out that’s only a fraction of the more than 2 million Florida homeowners who are seriously underwater, including 144,000 in Palm Beach County, according to RealtyTrac.

They fear the plan is too late and too restrictive.

“The principal reduction funds are limited to those who are current on their mortgages, this when we are in our fifth year of a foreclosure crisis and collapsing housing prices,” said Alice Vickers, an attorney who works for the Florida Consumer Action Network. “This money could have been used long ago to help homeowners who have now lost their homes.”

Applications for the new plan will be accepted on a first-come, first-served basis beginning 9 a.m. Wednesday on the website www.principalreductionflhhf.org.

The principal reductions will be paid for by the state’s $1 billion Hardest Hit Fund, a federal program that has allocated $7.6 billion to 17 states and the District of Columbia since it was first announced in 2010. Florida has two ongoing Hardest Hit programs that help pay the mortgages of unemployed and underemployed homeowners.

Once considered taboo by lenders, principal reductions became more accepted after the 2012 National Mortgage Settlement required banks to write down mortgage debt on some loans.

Under Florida’s plan, the banks aren’t out anything. The program pays down the debt and asks the lender to readjust mortgage payments to reflect the lower principal balance. The Hardest Hit money is technically a loan, but one that is forgiven if the homeowner stays in the house for five years. If the home is sold before five years, a portion of any money left after paying off the loan must go back to the Hardest Hit Fund.

“Especially in Florida, anything that promotes giving people an opportunity to build equity in their homes is a good thing,” said Ira Rheingold, executive director of the National Association of Consumer Advocates. “It’s a chance for people to become more than glorified renters.”

But Rheingold also argues that banks should be forced to meet the Hardest Hit program partway by also contributing to the reduction.

“I do have some problems with the state just giving money to the mortgage companies,” he said. “They made a lot of bad loans, created these problems and there is a loss there that they really should take.”

Not all mortgage servicers are participating in the principal reduction program, but major lenders, including Bank of America, JPMorgan Chase and Wells Fargo have agreed to accept the money.

Initially, 25,000 applications will be accepted with the 10,000 homeowners chosen out of those. If the program proves successful it could be expanded, said Stephen Auger, executive director of the corporation.

Florida’s two other Hardest Hit programs opened statewide in April 2011. The plans have faced criticism for not reaching enough people. As of this month 12,500 borrowers statewide had been approved for money, with about $302.8 million spent or committed.

The state must spend its $1 billion by 2017 or risk losing it.

“I do commend the efforts of those at the Florida Housing Finance Corp. who I know have worked hard on this issue,” said Vickers about the new principal reduction program. “I just hope it’s not too little, too late.”

Eligibility requirements include:

Must be a U.S. citizen and Florida resident

Must be current on loan payments

Home must be the borrower’s primary residence

Total household income must be below 140 percent of the median income. Median income levels can be found at www.huduser.org

Home must have been bought before Jan. 1, 2010

Outstanding mortgage must be $350,000 or less

Loan-to-value ratio must be 125 percent or greater

For more information go to www.principalreductionflhhf.org