Keep Your Home California Expands Eligibility and Benefits
Updates to the $2 billion program expected to help more families remain in their homes.
SACRAMENTO - California's program to provide mortgage assistance to homeowners struggling to remain in their homes is making it easier to become eligible for help.
Keep Your Home California, a federally-funded program administered by the California Housing Finance Agency, announced today that it is removing the "cash out" restriction from all four programs and will allow homeowners who own additional properties to qualify for much-needed assistance. Additionally, the length of time unemployed homeowners may receive mortgage assistance has been extended and the amount of money available has been increased.
"This expanded eligibility will allow more families to qualify and receive greater assistance," said Claudia Cappio, Executive Director of the California Housing Finance Agency. "We are continuously evaluating our experience so far and making adjustments like these based on the initial results of the Keep Your Home California program."
Keep Your Home California is a $2 billion effort established under the U.S. Treasury's Hardest Hit Fund to offer mortgage assistance to low and moderate income homeowners who are delinquent or facing imminent default on their mortgage. There are four programs that make up Keep Your Home California, all of which have been developed to address different aspects of the current housing crisis and help homeowners facing financial hardships. Nearly 8,000 homeowners have benefited or are in process to receive funds from the state-run program, which was fully implemented in February.
The primary changes are:
- Removing the "cash-out" restriction from all four Keep Your Home California programs. Homeowners were previously not eligible for the Principal Reduction Program if they had consummated a cash-out refinance on their home. This exclusion has now been eliminated under all four programs.
- Allowing homeowners who own additional properties to qualify for Keep Your Home California. Under the new policy, homeowners can own additional properties, which will help address situations where homeowners were additional signers on a home for a relative.
- Increasing mortgage assistance for unemployed homeowners from six months to nine months. Out-of-work homeowners will now be able to receive as much as $3,000 per month for up to nine months to cover mortgage, tax and insurance payments through the Unemployment Mortgage Assistance Program. Homeowners must be receiving benefits from the California Employment Development Department to be eligible.
- Increasing maximum funding from $15,000 to $20,000 to reinstate past-due mortgage loans. The Mortgage Reinstatement Assistance Program allows homeowners who have faced a financial hardship to reinstate their past-due mortgage loans, basically catching up on their loan payments.
"Homeowners who might have been found ineligible before are encouraged to contact Keep Your Home California again to see if they qualify under these new guidelines," Ms. Cappio said.
In addition to the Unemployment Mortgage Assistance Program and the Mortgage Reinstatement Assistance Program, Keep Your Home California also offers a Principal Reduction Program that will lower the amount owed on mortgages by as much as $50,000 in an effort to achieve affordable monthly payments for the homeowner. The Principal Reduction Program requires the mortgage servicer to match the amount on a dollar-per-dollar basis, so the maximum benefit to a homeowner could be a $100,000 reduction in principal.
A fourth program, the Transition Assistance Program, provides as much as $5,000 in relocation costs for homeowners who have decided to transition out of homeownership through a mortgage servicer-approved short sale or deed-in-lieu of foreclosure.
In order for homeowners to qualify for any of the four Keep Your Home California programs, their mortgage servicers must be participating. Almost 50 mortgage servicers now participate in the program; these servicers cover more than 85 percent of the mortgages in California. For a list of servicers and the programs they participate in, visit www.KeepYourHomeCalifornia.org/participating.htm.
Homeowners seeking information about the program are encouraged to call 888.954.KEEP(5337) between 7 a.m. and 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays, or visit www.KeepYourHomeCalifornia.org (a Spanish-language site is available at www.ConservaTuCasaCalifornia.org).
888-954-KEEP(5337)