Struggling California homeowners urged to apply for mortgage relief as program nears end

A pandemic-era relief program for homeowners who are behind on their mortgages, property taxes and other payments is entering its final phase as funds dwindle, and authorities are issuing a last call for applicants who may be struggling.

The California Mortgage Relief Program was funded through the 2021 American Rescue Plan Act. So far, almost $830 million of more than $900 million has been distributed in grants to people who fell behind because of COVID-19 and its lingering financial consequences.

Though much of the conversation has centered on relief for renters in the pandemic’s wake, plenty of homeowners, especially low and moderate-income ones, were put in jeopardy, too.

“It was essential that homeowners were also put into the equation,” said Rebecca Franklin, president of the California Housing Finance Agency Homeowner Relief Corporation, which administers the program. Given the state’s housing crisis, for those with less earnings and resources, “if they were to lose their homes, the reality is regaining ownership is very challenging.”

Nearly 34,000 grants have been paid out, averaging close to $25,000 each, though awards can be up to $80,000. The money can be used to offset past-due mortgages, delinquent property taxes, loan deferrals and late taxes and insurance for reverse mortgages after January 2020. The majority have gone to households considered at most low income. Households considered at least moderate income have gotten over one-quarter of awards. Homeowners in Sonoma, Lake, Mendocino and Napa counties have received 699 of the state grants totaling $17 million in funding locally.

“Having this kind of money available in this higher dollar amount for homeowners is just invaluable,” said Maeve Elise Brown, executive director of Housing and Economic Advocates, a legal services nonprofit for low and moderate-income tenants, homeowners and homeless Californians. “There are parameters to the program, and not everybody has been within its boundaries, but for the many who have, it’s been kind of mind blowing.“

Though California’s foreclosure rate is still relatively low compared to other states, it’s been on the rise, part of a nationwide trend.

“I think we’re still in an environment in which generally as a country we think if you’re a homeowner, you’ve made it. In some ways the pandemic was another wake-up call for all of us post-foreclosure crisis about the vulnerability of homeowners,” Brown said. “We get so excited about becoming homeowners and the hope of it — meaning building a financial future or trying to move into the middle class for the first time for some households — and we don't we don't think collectively about that it's also easy to lose what you’ve got.”

Broadly, Americans’ savings cushions have dwindled, with less than half saying they can afford a $1,000 emergency expense. That’s left less room to keep up with housing costs through retirement or after weathering a job loss or unexpected medical bills.

While previous generations mostly paid off their mortgage debt by retirement, more and more older Americans are still carrying those costs with them into their later years. The share of homeowners over 75 with a mortgage has tripled since 1998 to 30% in 2022, according to an Urban Institute analysis, and the amount of debt held has also jumped sharply. During the height of the Covid-19 epidemic, in 2021, the Consumer Financial Protection Bureau found that more than 680,000 homeowners over age 65 were behind on mortgage payments.

Research shows that Black and Latino homeowners are particularly vulnerable since, on average, they carry a higher level of debt and have fewer liquid assets in case of emergency. That is largely because of a long history of wide-ranging racist policies that created imbalances in homeownership and wealth building opportunities. Relatedly, people of color were also harder hit during the pandemic, which is why Franklin said the California Mortgage Relief Program put particular effort into reaching these communities.

As funds have continued to be available, program administrators have adjusted the criteria to expand the eligibility pool, for instance extending missed payment deadlines to Feb. 1, 2024. The offerings and requirements to qualify are somewhat complex, but online guidelines and a call center are available to walk people through the process. Franklin urged struggling homeowners to reach out, since even if not eligible, the program can connect them with various other free support services.

”If you’re having a problem, you’re not alone, and we’re here to help,“ Franklin said. ”Even if it may not be monetarily, we can at least get you educated on what your options are.“

The program will run until funds are depleted.

“In Your Corner” is a column that puts watchdog reporting to work for the community. If you have a concern, a tip, or a hunch, you can reach “In Your Corner” Columnist Marisa Endicott at 707-521-5470 or marisa.endicott@pressdemocrat.com. On X (formerly Twitter) @InYourCornerTPD and Facebook @InYourCornerTPD.