A new program in California aims to help low- and moderate-income seniors with reverse mortgages on their homes to avoid foreclosure.
The Reverse Mortgage Assistance Pilot Program, organized by Keep Your Home California, will help eligible seniors manage their delinquent expenses, including property taxes and homeowner’s insurance, and provide as much as $25,000 in assistance.
The program will also provide up to 12 months of additional assistance for future property expenses.
The program expands the mission of Keep Your Home California, a federally funded mortgage assistance program run by the California Housing Finance Agency.
Keep Your Home California has set aside $25 million for the pilot program, which it expects could benefit around 1,400 homeowners.
To take part in the program, senior homeowners 62 years or older must have a Federal Housing Administration Home Equity Conversion Mortgage, also known as a reverse mortgage, on the property where they reside.
They must also meet income limits set on a county-by-county basis and have experience some of financial hardship. This can range anywhere from a reduction in income to high medical bills to a death in the family.
Six reverse mortgage servicers have signed on to the program: Champion, Financial Freedom, James B. Nutter, Residential Mortgage Solutions, SunWest and Wells Fargo.
The pilot program’s funds come from the nearly $2 billion the U.S. Treasury Department’s Hardest Hit Fund allocated to create Keep Your Home California in 2011.