In January the State of California was provided federal dollars to help unemployed home owners pay their mortgage. The program is called Keep Your Home California. The program was allocated $874,995,915.28 (Really, 28 cents?) and intended to help home owners avoid foreclosure while looking for new employment. Eligibility requirements include:
- Homeowner must qualify as a low-to-moderate income household, as follows:
- Low-to-moderate income of 120% or less of the HCD Area Median Income (as defined by the California State Department of Housing and Community Development), for a family of four, in the county where homeowner resides. (For Santa Clara County, for a family of four HCD is $124,000)
- A loan financed in whole or in part by bonds that are tax-exempt under IRC section 143, the homeowner is presumed to satisfy income limits.
- Homeowner must complete and sign a Hardship Affidavit / 3rd Party Authorization
documenting the reason for the hardship.
- Homeowners who have recently encountered a financial hardship due to
underemployment or unemployment, including those whose financial hardship is related
to their military service.
- Homeowner must agree to provide all necessary documentation to satisfy program
guidelines established by CalHFA MAC.
- Homeowner must be currently eligible to receive unemployment benefits.
- Mortgage loan is delinquent or at risk of imminent default as substantiated by
homeowner’s hardship documentation. Loans in foreclosure are not eligible.
- Homeowner in an “active” Chapter 7 or Chapter 13 bankruptcy is eligible for the program
subject to the homeowner’s counsel or bankruptcy trustee approval in accordance with
local court rules and procedures.
- General program eligibility is determined by CalHFA MAC, the housing counselor or
servicer based on information received from the homeowner. Program-specific eligibility
is determined by CalHFA MAC on a first-come/first-approved basis until program funds
and funding reserves have been exhausted. Loan servicer will implement the HHF
program based on participation agreement terms and conditions.
- Current unpaid principal balance (UPB) of the first lien mortgage loan is not greater than
$729,750 (GSE conforming limit for a one-unit property).
- The property securing the mortgage loan must not be abandoned, vacant or condemned.
- The applicant must own and occupy the single family, 1-4 unit home (an attached
or detached house or a condominium unit) located in California and it must be their
The program provides “mortgage payment assistance equal to the lesser of $3,000 per month or 100% of the PITI (principal, interest, tax, insurance) and any escrowed homeowner’s association dues or assessments, for up to six (6) months, with the purpose of preventing avoidable foreclosures until such time that the homeowner retains employment sufficient to meet the demands of satisfying their regular mortgage payment.”
Program assistance limitation is “up to $18,000 per household total (average funding of $14,455.43), equaling the lesser of $3,000 per month or 100% of PITI and any escrowed homeowner’s association dues or assessments (and in all cases, subject to the HHF Program maximum benefit cap of $50,000 with respect to monies previously received under other HHF Programs, if any).”
The structure of the assistance is in the form of non-recourse, non-interest bearing, subordinate loan secured by CalHFA. At the conclusion of 3 years, the subordinate loan will be released. “Loan funds will only be repaid to Eligible Entity (CalHFA MAC) in the event of a sale or refinance with sufficient net equity proceeds prior to forgiveness. Recovered funds will be recycled in order to provide additional program assistance until December 31, 2017, at which time any recovered funds will be returned to Treasury.”