CalHFA Programs Designed to Help Struggling Homeowners
The California Housing Finance Agency, or CalHFA, has been issued $700 million in federal funds by the Treasury's Housing Finance Agency Innovation Fund, which they've channeled into a project called Keep Your Home California. The program has been directed to submit program proposals for that money that would help struggling homeowners.
So far, they've come up with four programs that they've pitched to the Treasury. Three programs are designed to keep California homeowners in their homes and remain foreclosure-free. The last would provide assistance -- and encourage community stability -- to homeowners who opt for a short sale or deed-in-lieu, helping them transition into affordable housing.
CalHFA summarizes the programs thusly:
Unemployment Mortgage Assistance (UMA) – Intended to assist homeowners who have experienced involuntary job loss. CalHFA would provide temporary financial assistance in the form of a mortgage payment subsidy of varying size and term to unemployed homeowners who wish to remain in their homes but are in imminent danger of foreclosure due to short-term financial problems. These funds could provide up to six months of benefits with a monthly benefit of up to $1,500 or 50% of the existing total monthly mortgage, whichever is less.
Mortgage Reinstatement Assistance Program (MRAP) – Intended to assist homeowners who have fallen behind on their mortgage payments. CalHFA would provide limited financial assistance in the form of funds to reinstate mortgage loans that are in arrears in order to prevent potential foreclosures. These funds would provide benefits of up to $15,000 per household or 50% of the past due amount, whichever is less, with a required dollar-for-dollar contribution match from the lender, servicer, insurer and/or borrower.
Principal Reduction Program (PRP) – Intended to assist homeowners who have severe negative equity. CalHFA would provide capital on a matching basis with participating financial institutions to reduce outstanding principal balances of qualifying borrowers with negative equity. Principal balances would be reduced to market levels needed to prevent avoidable foreclosures and promote sustainable homeownership. The principal reduction program would most likely be a prelude to loan modification.
Transition Assistance Program (TAP) – Intended to promote community stabilization by providing homeowners with relocation assistance when it is determined that they can no longer afford their home. CalHFA's transition assistance would be used in conjunction with servicer/investor short sale and deed-in-lieu of foreclosure programs in order to help borrowers transition into stable and affordable housing. Borrowers would be responsible to occupy and maintain the property until the home was sold or returned to the lender as negotiated. Funds would be available on a one-time only basis.
If you have any questions about how these programs can help you, call me or email me and I will help guide you to the path that fits your situation.
