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State of California to hand out pandemic-related mortgage relief

Will use $1 billion in federal funds, expects average grant of $40,000

State of California to hand out pandemic-related mortgage relief
(iStock)

California homeowners who struggle to make their mortgage payments because of the pandemic could be in line for relief.

State housing officials will tap into federal funds to offer grants of up to $80,000 to owners who have fallen behind on their mortgages due to the pandemic, according to the Orange County Register.

The grants are part of a new $1 billion federally-funded program to help low- and moderate-income households threatened by foreclosure because of financial hardship during the pandemic.

The new California Mortgage Relief Program adds to forbearance programs that allow homeowners to defer home payments for up to 15 months.

And that doesn’t include $1.7 billion given since last year to more than 145,000 Californians for rental assistance. 

Housing officials said they expect between 20,000 and 40,000 homeowners will receive average grants of $40,000 to bring their mortgage payments up to date. The mortgage relief won’t have to be paid back.

“Struggling homeowners can now apply and get mortgage relief and get caught up on the housing payments they have missed,” said Tiena Johnson Hall, executive director of the California Housing Finance Agency. “We are committed to doing all we can to help Californians keep a roof over their heads.”

The relief aims to help stave off a wave of foreclosures in the state’s poorest neighborhoods and communities of color.

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An estimated 6 percent California homeowners – or more than 528,000 households – are behind on their mortgages, according to state housing officials. Roughly 12 percent of homeowners face foreclosure because of the pandemic.

Actual foreclosures number far less. Irvine-based RealtyTrac reported the state had 12,931 borrowers in foreclosure at the end of November.

To be eligible for the new mortgage relief, applicants must either receive some form of public assistance, spend more than 40 percent of their income on housing, or have been denied an alternate mortgage workout plan by their servicer.

The annual income of each household seeking mortgage relief cannot exceed their county’s median income. In Los Angeles, that means a family of four won’t qualify if it earns more than $118,200 a year.

Grants will only be available to homeowners who are at least two months behind on their mortgage and who can verify a COVID-19-related financial impact. Applicants can apply for grants at CAMortgageRelief.org, or call 800-569-4287.

The mortgage relief comes out of a $10 billion federal homeowner relief package in the American Rescue Plan approved last March.

“Forbearance, while helpful during the pandemic, was not going to be sufficient,” said U.S. House Rep. Maxine Waters, D-Los Angeles, who advocated for the funding package.

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[Orange County Register] – Dana Bartholomew

Tags
CoronavirusPandemicRental Assistance