A free reverse mortgage assistance program to help homeowners catch up on past-due property expenses and avoid foreclosure will shutter at the end of the month.
Keep Your Home California’s (KYHC) Reverse Mortgage Assistance Pilot Program, which allowed low- to moderate-income homeowners to receive as much as $25,000 in assistance, will stop accepting applications on Nov. 30 at 6 p.m. PST. The program has issued more than $9 million in assistance and helped about 700 households, according to a release.
The $10 million allocated for the pilot program, which launched in February 2015, is slated to run out by the end of this month. The money was part of the Hardest Hit Fund, provided by the federal government to provide targeted aid to families in the 18 states designated as “hardest hit” due to struggles with unemployment or sharp home price declines since the housing market fall.
“We worked through our first-mortgage program over the years and got some feedback from investors and servicers that there’s a group of seniors at risk of losing their home from property-related expenses,” Steve Gallagher, a spokesperson for Keep Your Home California, told Reverse Mortgage Daily.
The program helped people across the state, Gallagher said. However, five counties saw the most applications for the pilot program and received the most funding: Los Angeles, Riverside, San Bernardino, San Diego and Sacramento.
The program was a bit too short-lived, at two years and nine months, to get a sense of trends, Gallagher said. In addition, everyone’s situation is unique, and for any of KYHC’s programs, applicants had to be able to document a financial hardship, he noted. But there were some financial difficulties more common than others.
“Change to household income is a big one,” he said. “Medical bills — if people had medical bills, that might have caused them to fall behind on their property taxes or insurance. They had to pick one or the other.”
Though the Reverse Mortgage Assistance Pilot Program is the first of KYHC’s programs to shutter, the others are “on the home stretch,” according to Gallagher. There are no plans for program extensions or new pilot programs based on the funding that is in place, he added.
The program is ending because it reached the end of the funds, not because senior homeowners no longer need it, he observed.
“Now if the federal government decides they want to extend the program, who knows?” Gallagher added, but noted this wasn’t likely.
“Based on the funding we have, we won’t be doing any new pilot programs,” he said.
Written by Maggie Flynn