The U.S. Treasury Department has approved CalHFA’s plan to use nearly $700 million in federal funding to help  California families struggling to pay their mortgages. The “Keep Your Home” programs are focused on assisting low and moderate income families stay in their homes, when possible, and leveraging additional contributions from lenders and mortgage servicers.

Primary objectives for the Keep Your Home Program include:

* Preserving homeownership for low and moderate income homeowners in California by reducing the number of delinquencies and preventing avoidable foreclosures

* Assisting in the stabilization of California communities. Each of the Keep Your Home programs is designed to address one or more aspects of the current housing crisis by doing the following:

* Helping low and moderate income homeowners retain their homes if they either have suffered a financial hardship such as unemployment, have experienced a change in household circumstance such as death, illness or disability, or are subject to a recent or upcoming increase in their monthly mortgage payment and are at risk of default because of this economic hardship when coupled with a severe decline in their home’s value.

* Creating a simple, effective way to get federal funds to assist low and moderate income homeowners who meet one or all of the objective criteria described above. Speed of delivery will be balanced with fulfillment of the specific program’s mission and purpose.

* Creating programs that have an immediate, direct economic and social impact on low and moderate income homeowners and their neighborhoods.

CalHFA is not taking applications or maintaining waiting lists for the Keep Your Home Programs at this time.  The Keep Your Home programs are under development and will not be available until November 1, 2010. If you are currently struggling to make your mortgage payment, are in any stage of mortgage delinquency or are already facing foreclosure, it is important for you to contact your loan servicer or a HUD-certified housing counselor immediately. When the program does roll out, here are some important facts:

*Anyone who did a cash-out refinance is ineligible

*Homeowners who have lost their job and are in imminent danger of foreclosure due to a short term financial problem can obtain a payment subsidy of up to $1,500 or 50% of their monthly mortgage payment, whichever is less–for up to six months.

*Homeowners who have missed one or more payments can receive up to $15,000 or 50% of the past due amount, whichever is less, to reinstate the mortgage and prevent a foreclosure.  The lender, loan servicer, mortgage insurer, and or borrower must match the catch-up money on a dollar-for-dollar basis.

*Homeowners who have severe negative equity can receive up to $50,000 to reduce the principal balance on their mortgage to a market level to prevent an avoidable foreclosure and promote sustainable homeownership.

*Homeowners who can’t afford to keep their home and are willing to participate in the lender’s short sale or deed-in-lieu of foreclosure program can receive a one-time grant of up to $5,000 to transition to a more affordable residence.

To qualify, the home must be occupied as the primary residence, income restrictions must be met, a hardship must be evident, and there must be the ability to make the modified payment arrangement. Expect modifications to the program prior to rollout. A chart of the  income limits with this program is available. Please call the 24-Hour Home Hotline at 877-610-1717 ext 111 to request the chart of income limitations and other restrictions. If you would like to be notified when the program is activated in California, please send an email request to: or call the 24-Hour Home Hotline with your contact information.