If you have been listening to the radio lately, you may have heard commercials about a program called Keep Your Home California. If it was the same commercial that we heard, it did not go into much detail about what the program was about or how it worked. It did mention that it can help some California homeowners who are having financial difficulties keep their home, but how exactly can it do this and who can qualify for the program was not covered. Well, Keep Your Home California is actually a collection of five different programs, each geared towards helping qualified homeowners in a different way. Today we will take a look at the different programs and what it takes to qualify for some or all of them.
What is Keep Your Home California?
In February 2010, President Obama established the “Hardest Hit Fund” to provide aid to families who live in the eighteen states that were designated as “hardest hit.” This designation was given to states that had high unemployment rates or experienced steep declines in housing prices after the financial crisis and housing market crash. In June of 2010, California received approval to receive Hardest Hit funding and eventually was awarded almost $2 billion in funds to help California homeowners who qualify for the programs. The programs, which became known as “Keep Your Home California” were developed by organizations that are involved with helping homeowners who may be struggling to keep their home and are now administered by the state of California. Here is a quick look at the five different programs that make up Keep Your Home California.
Keep Your Home California Unemployment Mortgage Assistance
The Unemployment Mortgage Assistance (UMA) program was developed to assist homeowners who have suffered loss of income due to unemployment or underemployment. This program will provide mortgage payment assistance for up to 18 months to help homeowners avoid foreclosure. The payment assistance can be up to the lesser amount of $3,000 per month or 100% of the mortgage, interest and any back payments due to homeowner associations, insurance or property taxes.
Keep Your Home California Mortgage Reinstatement Assistance Program
The Mortgage Reinstatement Assistance Program (MRAP) is intended for homeowners who are in immediate danger of their home being foreclosed on. This program provides funding to help homeowners pay off any delinquent payments that they owe on their first mortgage. The total amount of assistance in this program is up to $54,000 per household.
Keep Your Home California Principal Reduction Program
The Principal Reduction Program (PRP) assists homeowners in reducing their outstanding principal balance on properties that are either under water and/or have unaffordable first mortgage payments. This program will modify the first mortgage to make the monthly payment more affordable for the homeowner. The total amount of assistance in this program is up to $100,000 per household.
Keep Your Home California Transition Assistance Program
The Transition Assistance Program (TAP) provides transition assistance to homeowners when/if it is determined that the homeowner can no longer afford to keep making payments on their home. This program can be used in conjunction with a short sale or with a deed-in-lieu program. The total amount of assistance can be up to $5,000 and is intended to be used to help homeowners with rent, moving expenses, security deposits, or any other expenses associated with moving into a new home or apartment. This program is offered only on a one-time basis.
Keep Your Home California Reverse Mortgage Assistance Pilot Program
This program was developed to assist low-to-moderate income senior citizens who own a home and are in danger of their home being foreclosed on. To qualify for this program, the homeowner must show an inability to pay their expenses associated with a Federal Housing Administration (FHA) Equity Conversion Mortgage (HECM) loan. The Reverse Mortgage Assistance Program will provide a forgivable loan to reinstate past due amounts on their HECM loan. Those who qualify will also receive an advance payment to be allocated to their approved property expenses for up to an additional twelve months. The total amount of assistance in this program is up to $25,000 per household.
Keep Your Home California Eligibility Requirements
To qualify for some or all of the programs under Keep Your Home California, applicants must meet the following requirements:
- Your home is in California
- The home must be your primary residence
- The amount of your first mortgage loan must be less than $729,750
- Your household income must be less than or equal to $107,150 (for Ventura County Residents)
- Must have experienced a qualified financial hardship
- You cannot be in active bankruptcy
If you meet all of the requirements, then one of the programs may be right for you. However, being able to afford your home is usually just one part of the equation. If you have other expenses (credit cards, past debts, etc.) that you cannot afford, reducing your mortgage payments may only be a temporary solution before you lose your home. If you are having financial difficulties, it may be best to seek the advice of a qualified counselor. Keep Your Home California has a list of Counseling Agencies that may be able to help figure out the best financial plan for you moving forward.