California’s Homeowner Assistance Fund: Over $500M Still Available for COVID-Affected Homeowners
As the state boasting the highest concentration of reverse mortgage volume in the United States, California wields significant influence in the reverse mortgage industry. The state received a substantial allocation of funds under the Homeowners Assistance Fund (HAF) program, part of the American Rescue Plan Act of 2021. Out of the $10 billion distributed nationally, California received approximately $1 billion.
However, a recent report in the San Francisco Chronicle reveals that almost half of this significant allocation, nearly $500 million, remains unutilized. This echoes the challenges faced by many states in raising awareness about the relief provided by the program.
In response to this underutilization, California is expanding the program to reach more residents. The delinquency date is being reset from March 1 to August 1, 2023. This adjustment is aimed at accommodating homeowners who are still grappling with the financial impacts of the COVID-19 pandemic.
Rebecca Franklin, president of the CalHFA Homeowner Relief Corp., stated, “We understand many homeowners are still grappling with the financial impact of the COVID-19 pandemic. Resetting the delinquency date means more families can now qualify for our program.”
One of the key challenges has been the limited outreach efforts, resulting in the program going relatively unnoticed by many potential beneficiaries in the state.
According to a program dashboard maintained by CalHFA, the state’s HAF funding has provided assistance to over 21,000 households, with an average relief amount of $25,332 per household. In total, it has disbursed $540,373,168 in relief.
Los Angeles County has received the highest concentration of relief funds, accounting for just under $142 million of the total amount distributed statewide. Over 4,800 households in Los Angeles County alone have benefited from the program.
The mortgage industry, including the reverse mortgage sector, has faced challenges in informing borrowers about the availability of HAF funding. Each state has set up its own administrative program for HAF funding, causing complications for mortgage servicers.
The reverse mortgage industry, in particular, has struggled to inform clients about the availability of HAF funds. The varying rules, guidelines, and processes in different states have added complexity to administering the program. Gail Balettie, SVP of Client Satisfaction at Celink, highlighted these challenges, likening the program to administering 50 different loss mitigation plans due to the differences across states.