California governor Gavin Newsom announced Monday that the state had received federal approval of a $1 billion mortgage assistance plan to assist struggling homeowners.
The state estimates that between 20,000 to 40,000 struggling borrowers will take advantage of grants, which will be sent directly to their servicers to cover past-due mortgage payments. Funding for the program comes via the
“During this pandemic, Californians have lost their jobs or had their paychecks cut, leading many to wonder how they can keep up with their housing payments,” said Lourdes Castro Ramírez, the state’s secretary of the business, consumer services and housing agency.
According to Attom Data Solutions, one out of every 6,557 homes entered the foreclosure process in California in October, ranking it 12th among all U.S. states. The application process for the state’s program opens in the coming weeks and rolls out just as hundreds of thousands of borrowers recently saw
“Homeowners who have had their mortgage payments paused during the pandemic are now facing the end of those forbearance periods,” said
The news from California comes just two weeks after New York State obtained similar federal approval for a $539-million mortgage relief program. In addition to providing financial assistance with past payments, New York’s plan, which is scheduled to start accepting applications on Jan. 3, also has provisions to help unemployed homeowners with up to six months of future housing payments.
The New York State attorney general’s office will play a large role in the rollout of the program. Attorney General
Included as a program within the American Rescue Plan Act in March, the Homeowner Assistance Fund is expected to deliver close to $10 billion in mortgage and housing assistance to borrowers across the country. But review and approval of each state’s program has moved slowly, with New York being just the first jurisdiction to receive the green light from the Department of the Treasury.