California launches mortgage relief program to help homeowners: Who qualifies, how to apply

California
Stacks of cash are seen in a file photo. (iStock/Getty Images Plus)

Stacks of cash are seen in a file photo. (iStock/Getty Images Plus)

California’s expansive mortgage relief program to help tens of thousands struggling homeowners is now accepting applications online.

The California Mortgage Relief Program aims to help up to 40,000 residents who fell behind on housing payments during the COVID-19 pandemic, according to a news release from the state.

Eligible households can qualify for a maximum of $80,000 for their past due housing-related bills, with payments being sent directly to their mortgage provider or bank, the release stated. Homeowners won’t need to repay the state.

Altogether, $1 billion will be paid out, with funding coming from the federal American Rescue Plan that passed last March. California’s program was approved by the U.S. Department of Treasury on Dec. 20.

Who is eligible

California has set forth a series of requirements for residents who may be eligible to receive funds from the program. They include homeownership, income maximums and financial hardship related to the COVID-19 pandemic, according to the program’s website.

The criteria for homeowners includes the following:

  • They own and occupy a property in California, and its their primary residence and only home
  • Their residence is single-family home, condominium or permanently affixed manufactured home
  • The entire household combined earns at or below 100% of their county’s area median income (you can find the AMI for your county here)
  • They faced a financial hardship between Jan. 21, 2020 and Dec. 27, 2021, and they can demonstrate that it was because of the pandemic
  • At least two payments are past due by Dec. 27, 2021
  • The homeowner can’t have cash or assets equal to or greater than the money they need plus $20,000 (cash and assets do not include money in a retirement account, according to the website)

Beyond those, the applicant needs to meet at least one of these qualifications:

  • They receive public assistance
  • They are severely housing burdened
  • They have no alternative mortgage workout options through their mortgage servicer

All eligibility requirements can be found here.

How to apply

Homeowners can apply online by going to the website CaMortgageRelief.org.

First, the application will ask a series of questions to establish eligibility for the relief funds. Once that’s completed and it’s determined the person possibly qualifies, they will be able to begin filling out the application.

During the process, they may have to provide certain documents related to their household income and housing payments. The paperwork include mortgage and bank statements, utility bills and income documentation like paystubs or tax returns, according to the website.

Those who do not have access to a computer or internet can get help filling out the application, either by contacting their mortgage provider or calling a a HUD-certified housing counselor at 1-800-569-4287.

There’s technically no deadline to apply for the mortgage relief. The program will end once all funds are allocated — something that’s projected to happen by 2025, the website says.

A high volume of applications is expected, meaning it could take several weeks after applying for the money to be approved and sent, according to the state.

Full details about the program can be found here. The website also features a comprehensive “frequently asked questions” section for those looking for even more information.

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