Homeowners in California have been hit hard over the course of the pandemic, with an estimated one in 11 falling behind on their mortgage payments.
While federal relief programs have already helped tenants clear long pending dues on their rent, the state has recently introduced a relief program for qualified low and moderate-income Californian homeowners.
Understanding The California Mortgage Relief Program
If you own a house in California and have lost your job or suffered financial hardships as a result of the COVID-19 pandemic, the California Mortgage Relief Program will pay your mortgage, property taxes, and insurance bills up to $80,000.
For homeowners who are down on their luck, this program is a significant lifeline to get caught up with payments and start afresh, and the best part is, this one-time relief amount need not be paid back to the state.
This $1 billion program will be made available to anywhere between 20,000 to 40,000 homeowners across the state, provided they meet a series of requirements. This includes criteria such as home ownership, median income, COVID-related financial hardship and more.
Are You Eligible For This Relief?
According to the termsheet of the state program, applicants will have to meet all of the following conditions in order to qualify for the relief,
Own only one property, which you currently occupy, and is your primary residence.
It must be a single-family, condominium, or a manufactured non-mobile house currently in California.
Have experienced financial hardships after Jan 21st, 2020, and are behind on at least two mortgage payments before Dec 27th, 2021.
Household income must be lower than the median household income within your county. For example, the median household income in Los Angeles County is $68,044. So, if your property is located in Los Angeles, your household income cannot exceed this amount.
The program also requires that you have limited cash and other liquid assets in order to qualify.
Beyond this, applicants are required to satisfy one of the three requirements below to qualify for the relief program,
Qualified to receive public assistance, which can be food stamps, or any other form of welfare.
Severely housing burdened; That is, your mortgage and other housing related costs consume as much as 40% of your income.
Your lender has denied alternative options to avoid the impending foreclosure of your house.
How To Apply?
The application process is pretty straightforward, the program has a dedicated website – CAMortgageRelief.org
The process starts with a series of questions to determine your eligibility, and once you are qualified, you can start filling out the application.
You will be required to submit a few documents to further establish your claim. This includes bank statements, utility bills, mortgage statements, and proof of income for each adult in your household.
Apart from this, you will have to submit documents pertaining to other welfare schemes that you are currently availing, or proof that you are housing burdened, or your lender denying options to defer or modify the loan to help save your house from foreclosure.
The application can be submitted entirely online, and can be completed in less than 30 minutes. Once approved the amount will be released directly to the company servicing your loan.
Consider Mortgage Refinance Too
If you are a struggling homeowner, make sure to consult your mortgage servicer first, regarding other options that you can try before placing your hopes on the state relief program.
Your interests are aligned with that of a mortgage service right owner, in fact they will try to take every step necessary to keep homeowners in their homes.
According to some experts, modification of existing loans are far more advantageous to buyers in the long run than just the one time benefit from the state.
If you are looking for a long-term solution to substantially enhance your cash flow position, you have to consider refinancing your mortgage loan. In fact, with low interest rates, and impending rate hikes, there is no time like the present to explore this.