California Mortgage Relief Program: 2025 Status and Current Homeowner Assistance Options

The California Mortgage Relief Program has been a significant topic for homeowners. It's crucial to have the latest information regarding its status and available alternatives in 2025. Many Californians have faced financial difficulties, particularly following the COVID-19 pandemic and various natural disasters. This makes mortgage assistance a critical need.

California Mortgage Relief Program: An Important Update for 2025

Program Status: No Longer Accepting New Applications

For homeowners searching for information on the California mortgage relief program status, it is essential to know that the original program is no longer accepting new applications as of May 2025. This program was designed to provide grants for COVID-19 related financial hardships.  

The program officially stopped taking new applications on May 1, 2024. The final homeowner grant was issued on September 30, 2024. This clarification is vital because the program was a substantial lifeline. Understanding its current status helps set realistic expectations and directs homeowners towards currently available avenues of support.

Original Purpose and Impact

The original purpose of the California Mortgage Relief Program was to offer a crucial safety net. It provided financial relief in the form of grants—not loans that needed repayment—to vulnerable homeowners impacted by the COVID-19 pandemic. These funds were intended to cover past-due housing payments, preventing foreclosures and helping families maintain their homes.  

The program's impact was considerable. It successfully assisted 37,301 households, distributing over $907 million in funds. The average grant amount per household was $24,000. These efforts directly prevented 902 imminent foreclosures, demonstrating the significant need it addressed.

Ongoing Support: Free Legal Aid

Although new grant applications are no longer being accepted, some support stemming from the original program continues. Notably, access to free legal aid assistance for homeowners is still available and is slated to continue through June 2025. This extended legal support acknowledges that financial repercussions often lead to complex legal situations, such as navigating foreclosure notices or disputes with mortgage servicers.

What the California Mortgage Relief Program Offered (A Retrospective Look)

To understand the context of current assistance options, it's helpful to look back at what the California Mortgage Relief Program previously offered. This historical perspective can inform homeowners about the types of support that were available. It also highlights the kinds of needs that were addressed, which can be useful when evaluating current or alternative programs.

Eligibility Criteria (Past)

The program was designed to assist homeowners who met specific criteria, reflecting its focus on those most affected by the pandemic. Key requirements included:

• Having experienced a financial hardship directly related to the COVID-19 pandemic after January 21, 2020.  
• A household income at or below 150% of their county's Area Median Income (AMI), with a significant portion of funds reserved for households at or below 100% AMI.  
• Owning and occupying a primary residence in California. Eligible property types included single-family homes, condominiums, permanently affixed manufactured homes, and properties with up to four units.  
• Having missed at least two mortgage payments or at least one property tax payment prior to February 1, 2024.  
• The original principal balance of the first mortgage loan could not exceed the "conforming loan limit" applicable at the time of origination.  
• Homeowners also had to meet certain asset limitations, generally not having liquid assets (excluding retirement savings) equal to or greater than the relief needed plus $20,000.  

The program's eligibility criteria evolved. Initial requirements were later broadened by increasing the AMI limit, including homeowners delinquent only on property taxes, resetting delinquency qualification dates, expanding eligibility to properties with up to four units, and allowing previously awarded homeowners to receive additional funds. This adaptability suggests a response to changing economic conditions and an effort to ensure all allocated federal funds were disbursed effectively.

Types of Financial Assistance Previously Available (Grants, not repayable)

The program provided grants that did not need to be paid back, offering substantial relief up to a maximum of $80,000 per household. This financial aid could be used for several housing-related debts:  

• Covering past-due mortgage payments.  
• Paying delinquent property taxes, with assistance amounts for this purpose evolving during the program.  
• Addressing arrearages for reverse mortgages, specifically for past-due property taxes and homeowner's insurance.  
• Reducing or completely eliminating partial claims or loan deferrals that homeowners had taken on due to pandemic-related financial difficulties.  

Past Application Process (Brief Overview)

Homeowners applied for assistance through an online portal at CaMortgageRelief.org. The process required submitting various documents, such as mortgage statements, proof of income (like W-2s, pay stubs, or unemployment benefits), and utility bills to verify residency.  

A contact center was also available to provide application assistance in multiple languages. This ensured broader accessibility for homeowners across California.

Current Mortgage Assistance and Foreclosure Prevention Resources for Californians (2025)

With the original California Mortgage Relief Program no longer accepting new grant applications, homeowners facing mortgage difficulties in May 2025 need to be aware of current mortgage assistance programs California offers. It's also important to know about ongoing federal initiatives and foreclosure prevention resources. The landscape has shifted from broad pandemic aid to more targeted solutions.

Seeking Help After the California Mortgage Relief Program

Accessing Free Legal Aid

A crucial remaining benefit connected to the California Mortgage Relief Program is the provision of free legal aid services, continuing through June 2025. Homeowners can access these services for issues such as:  

• Foreclosure prevention guidance.
• Review of loan documents.
• Assistance with loan modification applications.
• Help with problems related to reverse mortgages.
• Addressing predatory lending or equity-stripping scams.

A list of participating legal aid organizations is available on the official California Mortgage Relief Program website, camortgagerelief.org. This legal support can be invaluable.

The Role of HUD-Approved Housing Counselors

Consistently recommended by state and federal agencies, HUD-approved housing counselors offer free or low-cost, unbiased advice. These counselors can:  

• Assess a homeowner's financial situation.
• Explain available options for avoiding foreclosure.
• Help communicate with mortgage servicers.
• Provide guidance on budgeting and credit issues.  

Their role is critical in helping homeowners make informed decisions. Homeowners should consider contacting a counselor as a primary step.

Table 1: How to Find a HUD-Approved Housing Counselor

Ongoing and Upcoming State/Federal Assistance Programs (as of May 2025)

Several programs at the state and federal level may offer assistance:

• FHA COVID-19 Recovery Options (Federal): These options are for borrowers with FHA-insured loans who are 61 days or more delinquent through April 30, 2025. They include:
  • COVID-19 Recovery Standalone Partial Claim: Places mortgage arrearages into a zero-interest subordinate lien, payable when the home is sold, refinanced, or the mortgage is otherwise paid off.  
  • COVID-19 Recovery Modification: Permanently changes loan terms to achieve a minimum 25% reduction in the principal and interest (P&I) portion of the monthly payment.  
  • Payment Supplement: Available by January 1, 2025, this uses partial claim funds to temporarily reduce a borrower's monthly mortgage payment for up to three years. Homeowners with FHA loans should contact their mortgage servicer or the FHA Resource Center at 1-800-CALL-FHA (800-225-5342).  
• CalHFA CalAssist Mortgage Fund (State - Upcoming): As part of Governor Newsom's $125 million mortgage relief package, $100 million is for direct mortgage assistance. This is for homeowners whose primary residences became uninhabitable due to natural disasters declared since January 1, 2023, and who are at risk of foreclosure. Administered by CalHFA, this program is expected to launch by June 2025. Covered disasters may include the Park Fire, Franklin Fire, and the Palisades and Eaton Fires. Interested homeowners should sign up for CalHFA's eNews Announcements for updates.  
• Specific Disaster Relief Measures (State/Federal): Following major disasters, various relief measures are often announced:
  • Lender Forbearance: Many California financial institutions offer 90-day mortgage payment forbearances, late fee waivers, and temporary moratoriums on new foreclosures for homeowners in designated disaster areas.  
  • HUD Foreclosure Moratoriums: HUD frequently implements 90-day foreclosure moratoriums on FHA-insured mortgages in Presidentially Declared Major Disaster Areas (PDMDAs).  
  • FHA Disaster Loans: FHA offers Section 203(h) mortgage insurance for disaster victims and Section 203(k) loans for repairing damaged homes.  
• USDA Section 504 Home Repair Loans & Grants (Federal - Rural): This USDA program assists very-low-income homeowners in eligible rural areas.
  • Loans: Up to $40,000 at 1% fixed interest for 20 years for home repairs.
  • Grants: Up to $10,000 for elderly (age 62+) very-low-income homeowners to remove health/safety hazards. Applications are accepted year-round through local USDA Rural Development offices.  
• CalHFA National Mortgage Settlement (NMS) Housing Counseling Program (State): CalHFA administers NMS funds to support HUD-certified housing counseling agencies. These agencies provide free, confidential counseling to residents at risk of eviction or foreclosure, including loan modification assistance. The program allows up to $1,500 per household for these services. Governor Newsom's $125 million package includes $25 million to extend this counseling program.  

Understanding Your Rights: New California Foreclosure Laws (Effective January 1, 2025)

Significant new California legislation effective January 1, 2025, aims to provide homeowners with stronger protections during foreclosure. These laws, AB 2424 and SB 1079, represent a substantial effort to rebalance the relationship between lenders, servicers, and homeowners. Awareness and proactive steps are necessary to utilize these rights.

Assembly Bill 2424 (AB 2424): Enhanced Homeowner Protections

This law introduces several key changes:

1. Clearer Information & Third-Party Notices: Mortgage servicers must inform borrowers that a designated third party (e.g., family member, HUD-certified counselor, attorney) can request copies of any Notice of Default and Notice of Sale. This facilitates timely assistance.  
2. Foreclosure Sale Postponements: Homeowners gain time to seek alternatives:
   • A 45-day postponement is mandated if the homeowner provides the trustee and beneficiary with a copy of a listing agreement with a licensed real estate broker, published on a platform like an MLS, at least five business days before the sale.  
   • An additional 45-day postponement must be granted if a bona fide purchase agreement is submitted at least five business days before the rescheduled sale. This can offer up to 90 days to sell.  
3. Fair Market Value (FMV) Protections at Auction:
   • The foreclosing lender/servicer must provide the trustee with the property's FMV (estimated within six months of the sale) at least 10 days before the sale.  
   • The trustee cannot sell the property at the initial auction for less than 75% of this FMV.  
   • If no bid meets this threshold, the sale is postponed for at least seven days. At the subsequent sale, the property can be sold to the highest bidder without the minimum FMV requirement.  

Senate Bill 1079 (SB 1079): Post-Auction Bidding Rights

SB 1079 created a process for 1-4 unit residential properties, allowing "eligible bidders" to purchase a foreclosed property after the auction.

1. Eligible Bidders Include:
   • Tenants residing in the property ("eligible tenant buyers").  
   • Prospective owner-occupants intending to live in the property.  
   • Nonprofit organizations and other entities meeting specific criteria.  
2. The Process:
   • Eligible bidders typically submit a non-binding notice of intent to bid within 15 days after the sale.  
   • They then have up to 45 days after the sale to submit a bid equal to or greater than the auction's winning bid, with required funds and an affidavit of eligibility.  

The goal of SB 1079 is to increase opportunities for tenants and owner-occupiers to acquire homes, potentially fostering neighborhood stability.

General Foreclosure Prevention Strategies

Beyond specific programs and new laws, several established strategies can help homeowners:

• Communicate with Your Servicer: The most critical first step.
• Loan Modification: A permanent change to loan terms to make payments affordable.  
• Forbearance: A temporary pause or reduction in payments.  
• Repayment Plan: Catch up on missed payments over time.
• Short Sale: Lender agrees to a sale for less than the mortgage balance if the home's value has dropped.  
• Deed-in-Lieu of Foreclosure: Voluntarily transfer title to the lender to avoid formal foreclosure.

Key Steps to Take if You're Facing Mortgage Difficulties in California

Navigating mortgage difficulties can be overwhelming. A clear, step-by-step approach can help:

1. Do Not Ignore the Problem: Address payment difficulties head-on.
2. Contact Your Mortgage Servicer Immediately: Explain your circumstances and ask about options.
3. Seek Free Help from a HUD-Approved Housing Counselor: They offer unbiased advice and can assist in negotiations. (See Table 1).
4. Explore Legal Aid: If facing foreclosure, check eligibility for free legal assistance (available through June 2025 via the CA Mortgage Relief Program connection).  
5. Gather Your Financial Documents: Be prepared with income verification, mortgage statements, bank statements, and a hardship letter.  
6. Understand Your Rights Under New State Laws: Be aware of protections under AB 2424 and SB 1079 if foreclosure is a risk.
7. Beware of Scams: Only work with your servicer or legitimate HUD-approved agencies. Be wary of upfront fees or guarantees to stop foreclosure.  
8. Check Eligibility for Specific Programs: Review criteria for federal options (FHA COVID-19 Recovery), state programs (CalHFA CalAssist Mortgage Fund for disaster victims), or USDA programs (for rural areas).

Important Contacts and Official Resources

Accessing reliable information and legitimate assistance is paramount.

Table 2: Key California Homeowner Assistance Contacts

Navigating mortgage challenges requires proactive steps and leveraging available legitimate resources. While the original California Mortgage Relief Program for COVID-19 hardships has concluded its application phase, ongoing support like legal aid, HUD counseling, specific federal programs, upcoming state disaster relief, and new homeowner protection laws provide avenues for California homeowners to seek assistance and protect their homes in 2025.

Frequently Asked Questions