Up to $18,000 for Unemployed California Homeowners


 
 
Earlier this month, the California Housing Financing Agency (“CalHFA”) began taking applications for their Unemployment Mortgage Assistance Program (“UMA”), a federally funded program which offers unemployed homeowners up to $18,000 over six months to pay their mortgage.

The UMA is one of four programs which are soon to be available under CalHFA’s Keep Your Home California program. The “Keep Your Home California program” is financed by the U.S. Treasury Department under the “Hardest Hit Fund”.

HARDEST HIT FUND

President Obama established the Hardest Hit Fund in February 2010 to provide targeted aid to families in states hit hard by the economic and housing market downturn. Hardest Hit Funds are coming out of the $50 billion set aside for foreclosure prevention under the Troubled Assets Relief Program

States were chosen for the Hardest Hit Fund either because they are struggling with unemployment rates at or above the national average or steep home price declines greater than 20 percent since the housing market downturn. California was one of the first states chosen and has been granted almost $2 billion in funds.
CalHFA has allocated $875 million of its hardest hit funds for unemployment assistance, $790 million for principal reduction, $129 million for mortgage reinstatement and $32 million for transition assistance.

KEEP YOUR HOME CALIFORNIA PROGRAM

The Keep Your Home California program contains four programs to assist California homeowners. Three of these programs are designed to help qualifying homeowners remain in their homes and avoid foreclosure:

• Unemployment Mortgage Assistance Program

• Mortgage Reinstatement Assistance Program

• Principal Reduction Program

The fourth program, the Transition Assistance Program, provides financial assistance for homeowners who can no longer afford their home and need help transitioning to other housing. The Transition Assistance Program may only be used in conjunction with a short sale or deed-in-lieu of foreclosure transaction.

A homeowner can receive up to $50,000 in combined benefits through these programs.

At this time, the only program available is the Unemployment Mortgage Assistance Program. CalHFA hopes to launch the other programs in mid to late February.

UNEMPLOYMENT MORTGAGE ASSISTANCE PROGRAM

UMA is intended to assist homeowners who have experienced involuntary job loss and are in imminent danger of foreclosure due to short-term financial problems.

UMA will provide temporary financial assistance in the form of mortgage payment subsidies up to $3,000 or 100% of the existing total monthly mortgage, whichever is less for up to six (6) months.

There are many requirements and restrictions for the plan, so many people may not qualify. Here are just a few of the requirements:

  • You must be eligible to receive unemployment benefits, but you cannot be within 90 days of exhausting them.
  • Your income must be 120% or less of the HCD Area Median Income. In Los Angeles County, your income must be $90,720 or less. In Orange County, your income must be $125,580 or less.
  • You must own and occupy the California home and it must be your primary residence. You cannot own any other real estate
  • Your loan must have originated on or before January 1, 2009 and the balance cannot be more than $729,750.
  • You must be delinquent or at risk of becoming delinquent, but you cannot be in foreclosure or more than three (3) payments delinquent.
  • You will not qualify if you refinanced your mortgage for more than the outstanding balance (except to pay for mortgage-related fees). If you refinanced just to get a lower rate, you will not be disqualified.
  • If you have a stand-alone second mortgage, such as a home equity loan or line of credit, you will not qualify.
  • You are eligible for consideration if you previously filed for bankruptcy, but not if you are in “active” bankruptcy

This assistance will be provided to eligible homeowners as a conditional lien. You are not required to make payments; however, if you sell your home or fail to maintain your loan in good standing for three (3) years from receiving the assistance, the lien becomes a loan and you may be required to pay it back from the proceeds of the sale of your home.

Eligibility is determined by CalHFA on a first-come/first-approved basis until program funds and funding reserves have been exhausted.

This is a public service announcement. We do not provide counseling or modification services, and you should beware of anyone who asks for a fee for such services.

Homeowners are requested to contact the CalHFA directly at 888-954-KEEP (5337) to see if they qualify.

You can determine your general eligibility by visiting the Eligibility Calculator at http://www.keepyourhomecalifornia.org/qualify.aspx.

References:

Keep Your Home California Income http://www.keepyourhomecalifornia.org/

Keep Your Home California Income Limits Retrieved from http://www.keepyourhomecalifornia.org/files/income.pdf</a>

Pender, K. (2011, January 9) CalHFA mortgage aid program for jobless begins Retrieved from http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/01/09/BU4N1H5FOR.DTL&ao=all

U.S. Treasury: Hardest Hit Fund Retrieved from http://www.treasury.gov/initiatives/financial-stability/housing-programs/hhf/Pages/default.aspx

Carey, P. (2011, January 12) State plan to help homeowners facing foreclosure kicks off Retrieved from http://www.mercurynews.com/business/ci_17078425?nclick_check=1

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