If you are a California homeowner facing foreclosure, a special program designed to assist low to moderate-income homeowners may help you retain your home or provide funds to relocate to new housing. Read on to learn more about the various types of aid available under Keep Your Home California and find out how you can apply for assistance.
Keep Your Home California’s Four Programs
The California Housing Finance Agency (CalHFA), which was established in 1975, provides financing for low and moderate-income homeowners in California. With approval from the U.S. Treasury Department and funded by the Hardest Hit Fund, CalHFA implemented the Keep Your Home California program to provide assistance to eligible California homeowners who are facing foreclosure.
The CalHFA Mortgage Assistance Corporation (CalHFA MAC) administers the various programs under Keep Your Home California, which include:
- The Unemployment Mortgage Assistance Program (UMA), which provides up to $3,000 a month in mortgage payments for as many as nine months for homeowners actively collecting unemployment benefits.
- The Mortgage Reinstatement Assistance Program (MRAP), which helps homeowners catch up on missed payments (up to $54,000) and reinstate their loans.
- The Principal Reduction Program (PRP), which provides funds to underwater homeowners to pay down the principal balances of their mortgage loans (up to $100,000).
- The Transition Assistance Program (TAP), which provides up to $5,000 to assist homeowners who are undergoing a short sale or deed in lieu of foreclosure relocate to new housing. (See our Short Sales and Deeds in Lieu of Foreclosure area for more information on these topics.)
Eligible homeowners can receive assistance from more than one Keep Your Home California program. For example, if you previously received UMA benefits, you may qualify for MRAP after you find a new job, though there is an overall benefit cap of $100,000 per household.
General Eligibility Requirements
You may qualify for one of the Keep Your Home California programs if you meet the all of the below criteria.
- You meet low and moderate area income limits. (Go to http://keepyourhomecalifornia.org/income-limits to see if you qualify.)
- You have a financial hardship (for example, unemployment, underemployment, death of a family member, unexpected medical bills, or a divorce) that is supported by a completed and signed Hardship Affidavit.
- You have sufficient income to make modified first mortgage payments according to participating servicer guidelines (MRAP and PRP only).
Additionally, your existing mortgage and the property securing that mortgage must meet the criteria outlined below.
- The current unpaid principal balance for the first-lien mortgage loan is $729,750 or less.
- You are late on your mortgage loan payments or are at risk of imminent default. (MRAP requires that you are at least two months behind on your first mortgage payments.)
- The home has not been abandoned, vacated, or condemned.
- The property is a single-family or one to four unit owner-occupied home.
- The property is in California.
- The home is your primary residence.
Mobile homes are eligible if they are permanently affixed to the real property that is secured by the first lien. (Learn more about foreclosure and repossession of mobile homes.)
How to Determine if You Are Eligible
Find out if you meet the basic eligibility requirements for a Keep Your Home California program by:
- going to the eligibility calculator at http://keepyourhomecalifornia.org/#get-started
- speaking with a Keep Your Home California representative (call 888-954-5337), or
- contacting a certified counselor from a HUD-approved counseling agency. (To learn more about housing counseling, see our article Free Counseling in California for Struggling Homeowners.)
Servicer participation in the Keep Your Home California programs is voluntary. (A mortgage servicer is the company that collects monthly mortgage payments from borrowers on behalf of the owner of the loan, as well as tracks account balances, manages the escrow account, handles loss mitigation applications, and pursues foreclosure in the case of defaulted loans.)
Because payments are made directly to the mortgage servicer, the servicer must agree to participate before you can receive assistance from the program. Practically all servicers have signed on for the UMA and MRAP, while participation in the remaining two programs is a bit more sporadic. To find out if your servicer is participating in the program you are interested in, go to http://keepyourhomecalifornia.org/participating-servicers or call a Keep Your Home California representative at 888-954-5337.
There Is No Cost to Participate
Since Keep Your Home California is funded by federal dollars, there is no fee to participate and you generally do not have to repay the assistance that your receive.
The assistance is provided in the form of a non-recourse, non-interest bearing subordinate loan secured by a junior lien that is recorded against the property (except for TAP assistance, which will not be structured as a loan). The junior lien will be forgiven after three to five years (depending on the program) from the date assistance was provided. You only need to repay the loan if you sell the home for a profit or refinance and take cash out before the forgiveness date.
How to Apply
To apply for assistance under Keep Your Home California, you can:
- call Keep Your Home California at 888-954-5337
- contact your mortgage servicer directly, or
- visit one of the HUD-approved counseling agencies participating in Keep Your Home California.
Funds are still available under this program and assistance will be given to approved homeowners on a first-come basis until the money runs out -- so don’t wait to long to apply. After December 31, 2017, remaining funds (if there are any) will be returned to Treasury.