California's share of Homeowner Assistance Fund reaches final phase

California housing officials announced this week its pandemic-related Homeowner Assistance Fund was entering its final stage and encouraged homeowners to apply before the money runs out.

The pending end to the pandemic-relief program marks the completion of a more-than-two-year effort to keep families from losing their homes as well as preserve their future opportunities to build wealth, state officials said. 

"As we draw nearer to the full disbursement of California's allocation of Homeowner Assistance Funds, eligible homeowners that act quickly can still take advantage of these resources," said Rebecca Franklin, president of the California Housing Finance Agency Homeowner Relief Corp., in a press release.

Applications will be accepted and processed as long as funds remain available, the state said. The announcement made no mention of a final application deadline but emphasized urgency, with no guarantee that everyone eligible would be able to receive assistance. 

The state aimed much of its outreach toward at-risk populations after introducing the program in late 2021. Last year, California also updated criteria for assistance by opening it up to a broader range of income levels relative to local county medians, as well as to borrowers who may have previously received some form of loan modification. Reverse-mortgage holders also became eligible.   

Qualified households facing financial challenges due to the Covid-19 pandemic can apply for a maximum of $80,000 in assistance to help with mortgage payments, property taxes or costs related to loan deferrals or partial claims.

"California's mortgage relief program has made a huge impact in underserved communities where families were in danger of losing their homes or hard-earned equity," said Stacey Tutt, the fund coordinator and senior staff attorney at the National Housing Law Project, in a press release.

Approximately three-quarters of families receiving grants had income at 100% or below their county median. The overall statewide average for aid recipients thus far is 69% of area median income.

Fifty-five percent went to households belonging to what the state considers socially disadvantaged communities. 

California received $1.1 billion in funding — more than any other jurisdiction — through the national Homeowner Assistance Fund, introduced to provide relief to U.S. households facing economic hardship during Covid-19. Launched thanks to provisions in the American Rescue Plan Act, almost $10 billion was made available across the country, with individual state and territory housing organizations responsible for administration and award. 

To date, the Golden State has provided grant assistance to 33,519 households, with an average disbursement of $24,555, according to agencies in charge of the program. Just over $823 million in total has been issued to its residents.   

"The California mortgage relief program has achieved remarkable success by preserving homeownership opportunities which are so vital to ensuring our most vulnerable populations have a shot at building generational wealth," noted Tiena Johnson Hall, executive director of CalHFA, which oversees the state's efforts.  

California's announcement comes after more than half of U.S. states have already sunsetted their HAFs upon exhausting their share of funding or else moved to place applicants on waitlists. Most recently, Oklahoma and New Hampshire closed application portals earlier in March.

Pennsylvania, on the other hand, reopened its program after moving administration and disbursement procedures in- house, following issues it encountered with a third-party vendor last year.