$1 Billion Available to California Homeowners Facing Foreclosure

Learn about California’s new COVID mortgage-relief program.

In early 2021, President Joe Biden signed the American Rescue Plan Act into law. This law created a Homeowner Assistance Fund, a federal program, to give $10 billion to the states to help households that are behind on their mortgages and other housing-related expenses due to COVID-19.

Eligible homeowners in California who've experienced a financial hardship because of the pandemic can get a piece of the $1 billion allocated to the state—up to $80,000 per household— from the California Mortgage Relief Program. This program uses federal Homeowner Assistance Fund money to help homeowners get caught up on overdue housing payments and avoid foreclosure.

How the California Mortgage Relief Program Works

Again, under the California Mortgage Relief Program, you can apply for money to pay delinquent housing payments (including principal, interest, taxes, and insurance, plus any escrow shortages) or reverse mortgage arrearages.

Assistance is structured as a nonrecourse grant that you don't have to repay. Funds from the program will be distributed directly to your mortgage servicer. Each household is limited to a maximum of $80,000.

Eligibility Requirements for the California Mortgage Relief Program

Californians who've experienced pandemic-related hardships and have fallen behind on their housing payments can apply. You must have suffered a material reduction in income or an increase in living expenses associated with the coronavirus pandemic between January 21, 2020, and December 27, 2021.

Also, you must be at or below 100% of your county's area median income, own a single-family home, condo, or permanently affixed manufactured home, and also meet at least one of the following qualifications:

  • you're receiving public assistance (that is, you receive all or a significant portion of your income from welfare, food stamps, or other forms of public assistance)
  • you're severely housing burdened (your mortgage and related costs consume more than 40% of your income), or
  • you have no alternative mortgage workout options through your mortgage servicer (excluding a short sale or deed in lieu of foreclosure).

Other eligibility requirements include the following.

  • you must have missed at least two mortgage payments before December 27, 2021
  • you can only own one residential property
  • the home can't be owned by a business (like an LLC, LP, or LLP)
  • the first mortgage you took out on your home was a "conforming loan," which means it was eligible for Fannie Mae or Freddie Mac to purchase it from your lender
  • you can't have cash or assets equal to or greater than the money you need plus $20,000 (not including money in a retirement account)
  • the home must be your primary residence (vacant or abandoned properties, second homes, and investment properties don't qualify), and
  • you're applying for assistance on your primary mortgage loan.

To check your eligibility, go here. To learn more about the program and eligibility criteria, see the program's Frequently Asked Questions section.

How to Apply for the California Mortgage Relief Program

To apply for help from this program, go to the California Mortgage Relief Program website. The site provides links to the application in English, Spanish, Chinese, Korean, Vietnamese, and Tagalog. You'll need to provide some documentation with your application, like mortgage statements, bank statements, utility bills, and income documentation (such as pay stubs, tax returns, or unemployment documentation).

If you're denied assistance, you can reapply if your circumstances change. You can also appeal the decision by emailing appeals@camortgagerelief.org. And if you don't qualify for assistance from the California Mortgage Relief Program, another state, local, or private sector program might be able to help you. Visit COVID19.ca.gov to find other housing-related resources.

How Long Will the California Mortgage Relief Program Last?

The California Mortgage Relief Program will continue until the earlier of September 30, 2026, or when all of the funds allotted to the program have been exhausted. California plans to use all of its funds by September 30, 2025. If you think you might qualify, it's best to apply as soon as possible.

Avoid Homeowner Assistance Fund Scams

If you get an unsolicited offer by phone, in the U.S. mail, through email, or by text message offering mortgage relief or foreclosure rescue services, be wary. Scammers are increasingly targeting homeowners who've been affected by COVID-19. The California Mortgage Relief Program is free. If anyone asks you to pay a fee to get housing counseling or foreclosure prevention services from this program, it's a scam.

Getting Help

If you need help with the application process, contact the California Mortgage Relief Program at 888-840-2594 or email info@camortgagerelief.org. You may also get help from a HUD-approved housing counselor at no cost. To find a counselor near you, go to HUD's website or call 800-569-4287.

If you have questions about the foreclosure process in California or want to learn about potential defenses to a foreclosure, consider talking to a foreclosure lawyer.

Effective date: December 27, 2021