State Programs Helping Homeowners in Need

Keep Your Home California is a new four-part initiative

Updated April 22, 2011

The State of California’s Housing Finance Agency has started a new, federally funded program called Keep Your Home California. The program:

Helps families with low and moderate incomes stay in their home, when possible, or,
Gives relocation assistance to homeowners who must transition out of the home due to foreclosure.

Keep Your Home California consists of four parts:

Unemployment Mortgage Assistance: for unemployed homeowners
Mortgage Reinstatement Assistance Program: for homeowners in default
Principal Reduction Program: for homeowners whose property is "underwater"
Transition Assistance Program: for homeowners who can longer afford their home

For complete information about these programs, please visit the Keep Your Home California website or call (888) 954-5337 weekdays from 7 a.m. to 7 p.m., or Saturday from 9 a.m. to 3 p.m.

Here is a brief summary of the programs:

Unemployment Mortgage Assistance

This program is designed to give financial assistance to eligible California homeowners who are unemployed but wish to retain their home. The goal of the program is to prevent avoidable foreclosures by providing subsidies of no more than $3,000 per month for up to six (6) months which gives the borrower more time to find employment. The financial assistance will be structured as a non-recourse, non-interest bearing subordinate loan secured by a lien recorded against the property. The lien will be forgiven in three (3) years if the loan remains in good standing and the borrower complies with program guidelines.

To be eligible, you must:

Have a low-to-moderate income. (Check for income limits here.)
Be at imminent risk of default (loans in foreclosure are not eligible).
Own and occupy the home as your main residence. It must be in California.
Be able to prove your hardship.
Be currently eligible to receive unemployment benefits.
Have an unpaid principal balance on the first mortgage of no more than $729,750.

Answer the program's brief survey for a better idea of your eligiblity.

You are not eligible if:

You voluntarily resigned from your previous job.
You own any other real property.

Mortgage Reinstatement Assistance Program

This program was developed to help borrowers in foreclosure cure their default to bring their loan current. Only mortgages in first position are eligible. Up to $15,000 or 50% of the past due amount is available through this program, whichever is less. Lenders that contribute through matching funds increase the benefit for homeowners.

To be eligible:

You must have a low-to-moderate income. (Check for income limits here.)
Loans in foreclosure are eligible.
The subject property must be your principal residence and must be located in California.
You must demonstrate that you have the income to sustain future mortgage payments.
The unpaid principal balance on the first mortgage can be no greater than $729,750.

You are not eligible if:

The property is abandoned, vacant or condemned.
Your hardship was the result of voluntary resignation of employment.
You own any other real property.
Your mortgage is less than two payments delinquent as of the date of request for assistance.
You have a bankruptcy pending.

Principal Reduction Program

The goal of the program is to give underwater homeowners an incentive to keep their home during this time of record decline in values and promote affordability. PRP will provide money to reduce the outstanding principal balance of the first mortgage loan to market levels needed to prevent avoidable foreclosure. This program may work in conjuction with a HAMP loan modification to help borrowers achieve a desirable income ration.

CalHFA will structure the assistance as a non-recourse, non-interest bearing subordinate loan secured by a junior lien recorded against the property. The lien will be forgiven in three (3) years if the loan remains in good standing and the borrower complies with program guidelines. Funds must be repaid if the borrower refinances or sales the property during the 3 year period.

To be eligible:

You must have a low-to-moderate income. (Check for income limits here.)
The unpaid principal balance on the first mortgage can be no greater than $729,750.
Loans in foreclosure are eligible.
The subject property must be your principal residence and must be located in California.

You are not eligible if:

You own other real property.
Your hardship is a result of voluntary resignation of employment.
You fail to satisfy lender underwriting guidelines, including a LTV of 120% or less.
You consummated a “cash-out” refinance of the first lien.

Transition Assistance Program

The TAP program was created to assist eligible homeowners who can no longer afford their home. Relocation assistance may be provided to homeowners who are involved in a short-sale or deed-in-lieu transaction with their lender/servicer. Borrowers must occupy and maintain the home until it is sold or becomes REO. Up to $5,000 is available through this program.

To be eligible:

You must have a low-to-moderate income. (Check for income limits here.)
Mortgage loan is delinquent or at rist of imminent default. Loans in foreclosure are eligible.
The unpaid principal balance on the first mortgage can be no greater than $729,750.
The subject property must be your principal residence and must be located in California.

You are not eligible if: