(LoanSafe.org) – Underwater homeowners nationwide have been receiving more assistance under the Hardest Hit Fund initiative, a nationwide program. The program has provided $7.6 billion to Housing Finance Agencies in 18 states, including Washington D.C. These funds are dedicated to helping homeowners avoid foreclosure and stay in their homes.

Some people are not aware of the Home Affordable Refinance Program (HARP) that has assisted many underwater homeowners to secure a refinance. This program has been around for several years and is specifically designed for mortgage owned by Fannie Mae or Freddie Mac. HARP is a national program and is not determined by state. To check out HARP, go to this link.

In California alone about 30% of homeowners are underwater on their mortgage. Since CA is the most populous state in the country, it has received $2 billion in funding from the Hardest Hit Program. California has created several programs under the state’s “Keep Your Home California” initiative.

All programs offered under the initiative are designed to help homeowners who are facing financial hardship. The Unemployment Mortgage Assistance Program for instance will cover up to $3,000 per month in mortgage payments for up to 9 months. The Mortgage Reinstatement Assistance Program is another program offers up to $25,000 to help homeowners catch up on missed payments.

California borrowers can also look into the Principal Reduction Program. Under this program, eligible homeowners can receive a principal reduction to help them make their monthly mortgage payments more affordable to make. Many borrowers have seen their mortgage drop by up to 30%. Over 60 Californian mortgage servicers are currently participating in the Principal Reduction Program.

Recent changes to the program initiatives:

– KYHC Program Benefit Cap: The KYHC program cap was increased from $50,000 to $100,000 per household. This change will go into effect in early June.

– Mortgage Reinstatement Assistance Program: The increase – from $20,000 to $25,000 – of funding for homeowners to catch up on their mortgage payments in case of financial hardship – such as a pay reduction at work, a divorce or significant health care bills. This change goes into effect on May 7.

– Principal Reduction Program: The elimination of a requirement that a qualified homeowner’s mortgage servicer match the federal funds dollar-for-dollar. This means Keep Your Home California will fund 100 percent of a principal reduction up to $100,000 as long as servicers provide a rate and/or term modification to ensure the homeowner has an affordable, sustainable monthly mortgage payment. This change will go into effect in early June.

“We are making these changes to encourage more servicers to participate in the Principal Reduction Program,” said Claudia Cappio, Executive Director of the California Housing Finance Agency. “Unfortunately, we had limited participation among servicers with the existing program and thousands of homeowners could not qualify for assistance as a result. We are constantly evaluating how to make these programs most effective for California homeowners and believe now that the match has been removed and the funds will be disbursed in a one-time payment, the major obstacles to servicer participation have been cleared.”

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