The California Housing Finance Agency is administering the Hardest Hit Fund for the state. This program was created with a budget of almost $700 million dollars, and it will help tens of thousands of homeowners across the state pay their mortgage and avoid a foreclosure.
The hardest hit fund will be providing aid in four distinct programs. Three of them focus on helping people stop or avoid a foreclosure filing. The fourth part of the program is intended to help people who are upside down on their mortgage. The amount of help that someone can receive is quite extensive. If you apply and are found to be eligible, you will be able to receive a maximum benefit from the program of $50,000. The money can be provided to you from any of the four main components of the program. Below you will find information on all four resources that are offered.
This part of the hardest hit fund was created to provide immediate, direct financial assistance and cash grants that will be used to reinstate a mortgage that has not been paid and that is currently in arrears. The goal of the reinstatement option is to prevent foreclosures and ensure people can stay in their home. Millions of dollars will be available, and funds available through this program will provide financial assistance of up to $15,000 per household or 50 percent of the past mortgage due arrearage amount. In addition, there will be a required dollar-for-dollar contribution match from the homeowners bank, mortgage servicer, insurer, the borrower themselves, or the lender.
This part of the program will help people who have lost their job or who have had a substantial reduction in household income. Through the Unemployment Mortgage Assistance Program, the California Housing Finance Agency will provide temporary cash grants and other forms of financial assistance in the form of a mortgage payment subsidy. The money will be provided to homeowners in a varying size, and the terms of the unemployment mortgage assistance will vary based upon an applicants personal situation. These funds will provide up to six months of benefits in the form of a mortgage being paid. The maximum monthly benefit will be up to $1,500 or 50 percent of the existing total monthly mortgage payment, whichever is less. It is important to note that this assistance program benefit cap will be $9,000.
If you are underwater on your home loan, the principal reduction program may be an option for you. It provides homeowners with cash, grants, and with other forms of financial assistance from participating financial institutions and banks to reduce outstanding the principal balances of qualified borrowers who currently have a negative equity on their home. It will reduce the loan balance to those market levels that are needed to promote sustainable homeownership and to ensure the prevention of foreclosures. Funds from the program will be available up to a maximum of $50,000 per qualified household. Funds will also need to be matched by your lender or mortgage holder.
Last, but not least, if the homeowner has explored all options and programs, and if it is determined that there is no way for them to keep their home, the California Hardest Hit fund will provide them with transition assistance to help them start anew. The California Transition Assistance Program can be used in conjunction with a deed-in-lieu or short sale in order to help the borrower transition to affordable housing that they can sustain over the long term, Funds from the TAP program will be available on a one-time only basis, and an applicant can receive up to $5,000 in assistance.
The California Housing Finance Agency will be managing the program for the state. They will be partnering with lenders, banks, and mortgage counselors across the region. The agency can be reached at 916-373-2585.
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