$2 Billion To Fund New State Program-Keep Your Home California

New State program takes effect this year. This new program is titled "Keep Your Home Califonia".. The funding for this program is $2Billion and is hoped to help around 100,000 homeowners. Unfortunately there are funds set aside for the program and once the have been used up, that’s the end of it. Much like some of the first time home buyer’s tax credit and new home construction progrms earlier in 2009-2010.

This program is available to eligible homeowners facing deaulting on their mortgage. The program either assists the homeowner in mortgage payments, or assists the homeowner is relocation costs in the case of a short sale.

The four components to the program are as follows. The first is offer up to $3000 a month for unemployed homeowners, up to six months benefits. The second is help those who have fallen behind on payments due to temporary circumstances with payments of up to $15,000 per household. The third is give relocation assistance to those who have completed a short sale or deed in lieu of foreclosure. The fourth is provide capital to cut principal balances or struggling borrowers who have negative equity.

Each component of the program requires lender participation. Currently GMAC,Guild Mortgage,CHFA,and CalVet are participating in all four components. Lenders that are participating in some of the components are JP Morgan Chase, Citi Mortgage, and Wells Fargo. This list should grow in the coming weeks.

Keep in mind nobody has the cure-all to the foreclosure crisis, and this program certainly will not stop it. The hope is that it will have an effect on the State and local levels. This program is intended for California residences that are owner occupied. Each applicant must meet certain requirments.

The Requirements are as follows:

Own and occupy their home as primary residence.
Not exceed $729,750 in current unpaid principal balance on first mortgages.
Meet low and moderate income requirements. (Varies by County, Sacramento County is $87,700)
Complete and sign a hardship affidavit to document resons for hardships.
Have mortgage loans that are delinquent or "in imminent default".
Have enough income to pay modified mortgage payments according to guidelines from servicers participating in the programs.

Funding for this program comes from the US Treasury Department’s Hardest Hit Fund. The money is set aside to help home owners stave off foreclosure. After receiving the funds ($2Billion), officials from California Housing Finance Agency spoke to community stakeholders throughout the State to create the four programs. For more information see the programs website:  keepyourhomecalifornia.org