$1 Billion Available to California Homeowners Facing Foreclosure

In early 2021, President Joe Biden signed the American Rescue Plan Act into law, creating a Homeowner Assistance Fund. This federal program provides $10 billion ($10,000,000,000) to the states to help households that have fallen behind on their mortgages and other housing-related expenses due to COVID-19. California has allocated $1 billion of this fund to the California Mortgage Relief Program, allowing eligible homeowners who have experienced a financial hardship because of the pandemic to receive up to $80,000 per household to help them catch up on overdue housing payments and avoid foreclosure.

How the California Mortgage Relief Program Works 

You can apply for up to $80,000 in money to pay delinquent housing payments (including principal, interest, taxes, and insurance, plus any escrow shortages) or reverse mortgage arrearages through the California Mortgage Relief Program. This nonrecourse grant does not need to be repaid and will be sent directly to your mortgage servicer.

Eligibility Requirements for the California Mortgage Relief Program

Those who have experienced pandemic-related hardships and fallen behind on their housing payments in California can apply if they have suffered a material reduction in income or an increase in living expenses between January 21, 2020, and December 27, 2021.

You must own a single-family home, condo, or permanently affixed manufactured home and have an income at or below 100% of your county’s area median. Additionally, you must 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.

How to Apply for the California Mortgage Relief Program

Go to the California Mortgage Relief Program website to apply for help from this program. Links to the application are available in English, Spanish, Chinese, Korean, Vietnamese, and Tagalog. You must provide some documentation with your application, such as mortgage statements, bank statements, utility bills, and income documentation (such as pay stubs, tax returns, or unemployment documentation).

If denied assistance, you can reapply if your circumstances change or appeal the decision by emailing appeals@camortgagerelief.org. If you don’t qualify for assistance from the California Mortgage Relief Program, COVID19.ca.gov offers other housing-related resources.

How Long Will the California Mortgage Relief Program Last?

It’s best to apply for the California Mortgage Relief Program as soon as possible, as the program will end either on September 30, 2026 or when all of the funds allotted to it have been used up. California expects to use all of its funds by September 30, 2025.

Call Us Today To Schedule Your Free Consultation

You don’t have to worry if you’re facing foreclosure. Our California Foreclosure Defense Lawyers are here to help you get back on track financially. We know how stressful this situation can be, so we’ll do our best to make sure you can relax. All you have to do is give us a call and we’ll get started.

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