Starting today, unemployed California homeowners can apply for up to $3,000 a month in mortgage assistance to tide them over for up to six months while looking for work.

The Unemployed Mortgage Assistance Program (UMA) is the first of four programs the state is scheduled to roll out as part of an initiative called "Keep Your Home California." The programs are supported by $2 billion in federal dollars provided through the Hardest Hit Fund.

The UMA program is available to low- and moderate income homeowners who have experienced an involuntary job loss and are in imminent danger of losing their home due to short-term financial problems. It's not available to persons who have taken a cash-out refinance or home equity line of credit, nor will the other three programs be available to homeowners who have done so.

To qualify, a borrower's mortgage servicer must have agreed to participate in the program. As of last weekend, only three lenders had signed up, although more are expected to do so shortly, according to the California Housing Finance Agency, which is running all four programs.

The Keep Your Home California initiative is designed to help homeowners who have suffered hardships such as unemployment, death, illness or disability in the household, or who are at risk of default due to an upcoming increase in their monthly mortgage payment. Other programs under the initiative will include:

  • Mortgage Reinstatement Assistance Program: Designed to assist homeowners who have fallen behind on their mortgages due to temporary change in household circumstances, this will provide up to $15,000 to help reinstate mortgages that are in arrears.
  • Principal Reduction Program: Will provide capital to reduce outstanding principal balances for homeowners in negative equity, usually as a prelude to a loan modification to stave off foreclosure.
  • Transition Assistance Program: One-time assistance to help homeowners relocate when they can no longer afford their home, in conjunction with a short-sale or deed-in-lieu of foreclosure.

Homeowners may take advantage of multiple programs, but there is a $50,000 cap on assistance per household. It's not clear how soon the next three programs will be available; all four were originally scheduled to roll out on Nov. 1 of last year.

In many cases, mortgage servicers will be expected to provide matching funds

The Hardest Hit Fund is providing $7.6 billion in homeowners assistance funds to 18 states that have suffered the worst impacts of the downturn in the housing market. California's $2 billion in funds make it the largest recipient under the program.

Published on October 11, 2014