California Mortgage Relief Program to pay homeowners with COVID-19 hardship up to $80K
“We are committed to supporting those hit hardest by the pandemic, and that includes homeowners who have fallen behind on their housing payments,” California Gov. Gavin Newsom said in a statement about the program. “No one should have to live in fear of losing the roof over their head, so we’re stepping up to support struggling homeowners to get them the resources they need to cover past-due mortgage payments.”
California’s new Mortage Relief Program is set to assist homeowners in the Golden State who have fallen behind on monthly payments and will provide qualifying residents with up to $80,000 in grant funding.
The program makes $1 billion in federal funding available to homeowners who encountered financial hardship due to COVID-19. The funds provided through the program also don’t need to be paid back, according to its FAQ page.
California Mortgage Relief Program gets federal approval
The relief program – which received approval by the U.S. Department of the Treasury in December 2021 – will provide a one-time grant in the form of a direct payment to those who qualify. It’s estimated that funds from the program could be made available to between 20,000 and 40,000 homeowners. The funding for the program is drawn from President Joe Biden’s American Rescue Plan Act’s Homeowner Assistance Fund.
“During this pandemic, Californians have lost their jobs or had their paychecks cut, leading many to wonder how they can keep up with their housing payments,” said Lourdes Castro Ramírez, California’s Secretary of the Business, Consumer Services and Housing Agency. “This program will help families keep their homes and provide the stability they need to recover from the financial, physical and emotional toll caused by the pandemic.”
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Who qualifies for the California Mortgage Relief Program?
Homeowners who meet the following eligibility requirements can utilize California Mortgage Relief, as per the program’s website:
- The household’s income is at or below 100% of the county’s area median income
- The homeowner must own a single-family home, a condo or a permanently affixed manufactured home in California
- Have faced a COVID-19-related financial hardship after Jan. 21, 2020
The homeowner must also meet at least one of these following requirements:
- Be receiving public assistance
- Be severely housing burdened
- Have been denied alternative mortgage workout options by their mortgage servicer
“Homeowners who have had their mortgage payments paused during the pandemic are now facing the end of those forbearance periods,” Tiena Johnson Hall, California Housing Finance Agency executive director, said. “The California Mortgage Relief Program will alleviate some of that anxiety and give eligible homeowners a chance to get caught up on those housing payments and regain that sense of security.”
How do you apply?
You have to do it online, at camortgagerelief.org If you don’t have access to the internet or a computer, you can ask a housing counselor to assist you. For help finding a counselor certified by the federal Department of Housing and Urban Development, call (800) 569-4287. You may also get help from the company servicing your mortgage.
The online application process starts with questions to determine your eligibility. If you meet the state’s criteria, you can then complete an application for funds. Here’s where you will need some paperwork to establish how much you earn and how much you owe.
According to the program’s website, among the documents you will need to provide are a mortgage statement, bank statements, utility bills and records that show the income earned by every adult in your household, such as pay stubs, tax returns or a statement of unemployment benefits. Applicants who are not reliant on public assistance or paying more than 40% of their household income to their lenders will also be asked for proof that their lender refused to defer debt or modify their loan to help them avoid foreclosure.
The site provides links to the application in English, Spanish, Chinese, Korean, Vietnamese and Tagalog.
“If you have all your information and documents gathered, you can fill out the application on a computer, smartphone or tablet in under 30 minutes,” Franklin said. “Documents can easily be uploaded through your smart phone by using your phone’s browser to log on to the application portal and taking a photo of the needed information and adding it to your application.”
When will your mortgage debt be paid?
This is a key question, given that the federal government lifted its moratorium on foreclosures of government-backed mortgages at the end of July. According to the state Attorney General’s Office, homeowners are still entitled to ask their lender for a debt-deferral deal that could keep them out of foreclosure for at least a few more months, but if your lender won’t grant you forbearance, you’ll need help in a hurry.
A spokeswoman for the program said officials are hoping to get the aid flowing quickly; the state has been running a pilot version of the program since August, so it’s not breaking new ground here, just scaling up. A key factor in how quickly your application can be processed is whether you provide all the necessary documents and attestations in a timely fashion.