California Hardest Hit Fund – Keep Your Home California Program
Keep Your Home California is the State of California hardest hit foreclosure prevention program established with funding of the Federal Hardest Hit Fund program. As a result of the economic crisis, California was one of the 18 U.S. States hit hardest by high unemployment and declining home prices. Under the Hardest Hit Fund Program, the State of California was allocated close to $1,97 billion. This monetary help became available to California low and moderate income eligible homeowners through the Keep Your Home California – a foreclosure prevention program administered by California Housing Finance Agency (CalHFA).
There are different housing programs under the Keep Your Home California – all of which federally funded and designed to help California homeowners facing financial hardships.
Keep Your Home California addresses the needs of low and moderate income homeowners who are struggling to make their mortgage payments as a result of the economic and real estate downturn. Keep Your Home California monetary assistance can be used by eligible California homeowners, on a case by case basis, for mortgage principle reduction, first mortgage reinstatement, unemployment monthly mortgage payments, a transition to new housing, and short sale assistance. Although the homeowners can apply and qualify for more than one of the listed foreclosure prevention options, the overall assistance is limited to $100,000 per household.
Keep Your Home California Eligibility Requirements
There are various requirements that must be met by a California homeowner with mortgage in order to qualify for Hardest Hit Fund assistance:
- The Home must be in California, Owner Occupied, and Primary Residence
- The Home must be Single Family 1-4 units attached or detached house or condominium
- The property securing the Mortgage Loan must not be abandoned, vacant or condemned
- First-Lien Mortgage Loan is less than $729,750
- Current Mortgage is delinquent or in imminent default
- Mortgage must be serviced by a participating Servicer
- The homeowner must sign Hardship Affidavit and provide supporting documents
- The homeowner must meet program income limits
Keep Your Home California offers four unique programs:
Principal Reduction Program
This option of Keep Your Home California program provides capital to eligible homeowners to help them reduce the outstanding principal mortgage balances, thus establishing affordable debt level and monthly payments. Principal Reduction of the mortgage is a direct monetary help to the qualifying California low-income homeowners when they are completing Permanent Mortgage Modification or HARP 2.0 Refinance. Principal Reduction Assistance in California can be up to $100,000 per household (average funding has been $67,000) and requires servicer/lender participation. A requirement for Principal Reduction Assistance is a mortgage balance greater than 120% of property ‘s Fair Market Value before the start of modification or refinance. The homeowner must not have assets (excluding retirement assets) equal to or greater than the amount of the principal reduction assistance. Principal Reduction Program has been allocated funding of $903,942,793 and is scheduled to end 2016 or when the funding is fully used.
Unemployment / Underemployment Mortgage Assistance (UMA)
Mortgage payment assistance option is available to eligible homeowners who have experienced an involuntary job loss and are receiving unemployment compensation benefits. UMA will provide temporary monthly mortgage payments including principal, interest and escrow expenses to eligible California homeowners who want to remain in their homes but experienced a loss of income due to unemployment or underemployment. The maximum amount of the monthly mortgage payment assistance is $3,000 per month for up to 12 months with the sole purpose of helping homeowners avoid foreclosure. To help delinquent borrowers, CalHFA will pay involved mortgage servicers directly to bring the mortgage current. The maximum UMA assistance per household is $100,000, including all other Keep Your Home California program assistance. Homeowners with a current monthly income source, excluding unemployment benefits, are required to contribute 31% of their income toward the first mortgage payment. California Unemployment Mortgage Assistance has been allocated funding of $715,595,915 and after the end of the program December 31, 2017, any remaining funds will be returned to Treasury. For more details on the reinstatement assistance details contact Keep Your Home California at: 888-954-5337.
Mortgage Reinstatement Assistance Program (MRAP)
This option of Keep Your Home California program helps eligible homeowners reinstate their first mortgage loan if they have fallen behind due to short-term financial problems. California Mortgage Reinstatement Assistance offers up to $25,000 to qualified homeowners so they can catch up on their mortgage payments. MRAP also helps borrowers by removing the need to capitalize the amount that needs to be reinstated and in a way, increases qualify for other Keep Your Home California options. One of the MRAP qualifying requirements is an adequate homeowner’s income in order to be able to sustain reinstated first-lien mortgage loan. California Mortgage Reinstatement Assistance Program has been allocated funding of $165,900,000 and is scheduled to end 2016 or when the funding is fully used.
Transition Assistance Program (TAP)
TAP is for homeowners who can no longer sustain their monthly mortgage obligation due to a hardship. The Transition Assistance Program provides eligible homeowners with one-time funding to help them transition to a new housing. TAP is designed to be used in conjunction with a short sale or deed-in-lieu.The one-time transition funding can be used for new housing rent, moving expenses, and security deposits. The TAP funds can be up to $5,000 per household and can be used with other Keep Your Home California programs. TAP-specific eligibility is determined by CalHFA on a first-come, first approved basis. Funding allocated to California Transition Assistance Program is $7,500,000 and after the end of the program December 31, 2017, any remaining funds will be returned to Treasury.
How to Apply for Keep Your Home California programs
Contact Keep Your Home California Help Line at 888-954-5337 to find out if you qualify for one of the four unique programs. You can contact your mortgage loan servicer or visit Keep Your Home California website. To determine program eligibility, a homeowner must complete a Program assistance application and provide all necessary supporting documents to be reviewed by the Program underwriters.
California – Making Home Affordable options
Making Home Affordable is a federal program designed to cover different homeowners’ hardships and financial situations. Under the program, there are various options that can help California homeowners in hardship stay in their homes. Depending on the situation California homeowners in hardship can apply to lower their monthly payments, lower the interest rate on their home loan or even get the principal reduction in some cases.
There are foreclosure alternatives and temporarily help for unemployed homeowners as well.
Here are some of the most used options under Making Home Affordable Program:
- Lower your monthly mortgage payments with Home Affordable Modification Program (HAMP)
- Lower your interest rate with Home Affordable Refinance Program (HARP)
- Check eligibility for principal reduction with Principal Reduction Alternative SM (PRA)
- Get help if currently unemployed with Home Affordable Unemployment Program (UP)
- Reduce your 2nd mortgage monthly payments with Second Lien Modification Program (2MP)
- Explore your foreclosure alternatives with Home Affordable Foreclosure Alternatives Program (HAFA)
- FHA Home Affordable Modification Program (FHA-HAMP)
HUD (US Department of Housing and Urban Development) approved housing counselor can be reached at: 888-995-4673 (Hearing impaired: 877-304-9709 TTY) to help you understand your options, prepare your application, and work with your mortgage company.