California HAF requirements extended in bid to entice more beneficiaries


The state of California has extended the eligibility rules for its mortgage relief program, funded by the Homeowner Assistance Fund (HAF) allocation in the American Rescue Plan Act of 2021.

The relief — which is available to reverse mortgage borrowers — is designed to assist anyone who has fallen behind on their mortgage payments due to the economic shock of the COVID-19 pandemic. A lack of awareness of the program’s existence, however, is one factor that led to its extension, according to the Los Angeles Times.

“[H]omeowners haven’t exactly beaten down the state’s doors for the free help — not because they don’t need it, but because they may not know about it or know how to get it,” the outlet reported. “So the California Mortgage Relief program has repeatedly extended the aid to more homeowners, and is now offering help to borrowers whose troubles began long after the COVID-19 restrictions were lifted.”

A lack of awareness has been a persistent problem for the HAF program across multiple states. In July 2023, the U.S. Department of the Treasury touted that the program had assisted more than 300,000 U.S. homeowners by curing defaults and keeping them in their homes, but it also committed to increasing the program’s reach. At that time, every state had received funding but only 14 states had spent more than 50% of their total allocation.

In total, $10 billion was allocated for the fund by the American Rescue Plan, with $1 billion going to California. While most of that funding has been distributed, nearly 25% of it — about $224 million — remains, with an average award amount of roughly $25,000, according to an official tally maintained by the California Mortgage Relief program.

“In the latest extension, assistance is available to qualified homeowners who’ve missed at least two mortgage payments by Feb. 1 and are still in arrears, or who’ve missed at least one property tax payment by Feb. 1,” the Los Angeles Times reported. “Various restrictions apply, but the main ones are that aid is available only for owner-occupied homes and that an applicant’s total household income must be no more than 150% of the area median income.”

Within the reverse mortgage industry, HAF has been primarily utilized by Home Equity Conversion Mortgage (HECM) borrowers who fell behind on their property taxes, homeowners insurance or other charges due to the pandemic. But reverse mortgage servicers have told the industry multiple times that it is a challenge to make reverse mortgage borrowers aware of the assistance available to them.

At an industry event in the summer of 2022, Celink reverse mortgage servicing professional Gail Balettie told attendees that mortgage originators could be uniquely suited to inform their clients about the program’s existence.

“We have done everything we can possibly think of,” Balettie said at the time in regard to getting the word out to reverse mortgage borrowers. “I’ve had HAF messaging on my statements since January, we do outbound phone call campaigns, we have it on our website, we do email campaigns, everything other than hiring homing pigeons.”



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