Angela Morrow was only eight months into a new career as a flight attendant when she was laid off from her job due to the COVID-19 pandemic, putting her at risk of losing her three-bedroom, two-bathroom home in San Bernardino County.

Morrow, 63, said she was able to save her home in Bloomington through the $1 billion California Mortgage Relief Program, which enabled her to pay off more than $54,000 worth of mortgage debt — relief that lowered her monthly payments for the long-term.

“Receiving that grant has been a monumental blessing for me,” Morrow said. “It created a solid foundation for my kids, and their future, after I’m gone.”

Today, state officials will announce they are expanding who is eligible for the program, including some who took second mortgages.

With $300 million already given out to 10,000 homeowners, as much as $700 million worth of aid remains available for borrowers who qualify for the program, which was created in December 2021 using federal dollars from the American Rescue Act.

The expansion comes as state officials say the pandemic era housing market — characterized by an uncertain economy, high home prices and now higher mortgage interest rates — could still imperil homeownership in the Golden State, particularly for lower- and middle- income families.

Fewer than 56% of Californians live in homes they or their families own, the second lowest rate of any state and just slightly higher than New York.

“People shouldn’t be penalized, and lose something that they’ve worked so hard to obtain, and lose that opportunity for generational wealth, due to circumstances outside of their control,” said Rebecca Franklin, president of the California Housing Finance Agency’s Homeowner Relief Corp., which is administering the mortgage relief program. “That’s what this program is about: To catch people up, to erase that long-term financial impact that the pandemic maybe had on them.”

California foreclosures remain at one of their lowest rates over the last two decades, with only 0.12% of homes in foreclosure as of last November, the most recent monthly data available, according to housing data firm CoreLogic. That compares to a high of 3.21% of homes in November 2010, during the last housing bust. Nevertheless, California families did face financial hardship during the pandemic, the CoreLogic data shows, with 3.72% of all homes in serious delinquency in August 2022, a recent high.

The difference in the pandemic economic downturn, state officials and experts said, is that mortgage companies and banks were willing to work with borrowers to defer payments and create additional home loans. High home prices can also help prevent foreclosure as homeowners can often sell their properties. But with high rents, selling is often not a good option for families, said Lisa Sitkin, a senior staff attorney with the National Housing Law Project, a nonprofit that advocates for tenants and low-income households.

Under the expansion of California’s mortgage relief program being unveiled today at a Sacramento nonprofit:

• Eligible homeowners who have already used the program and are in need of additional assistance can reapply, for as much as $80,000 in total grants.
• Homeowners can use the program to pay off second home loans, or loan deferrals, that they negotiated in the midst of the pandemic.
• The program will also be available to homeowners who have properties of up to four units, as long as those small landlords live on those properties.
• While the program was previously only available for people who had missed at least two mortgage payments and at least one property tax payment before last summer, it will now be available to those homeowners until March 1.

“People shouldn’t be penalized, and lose something that they’ve worked so hard to obtain, and lose that opportunity for generational wealth, due to circumstances outside of their control.”
— Rebecca Franklin, president of the California Housing Finance Agency’s Homeowner Relief Corp.

The program includes income and wealth restrictions. People can only receive assistance if their combined household income is not more than 150% of their region’s median income. Households that have cash or other assets worth $20,000 more than the total funds they are requesting are disqualified. (For more information, there’s a help page.)

The relief program is administered nationally by the U.S. Treasury Department, which relies heavily on individual states to distribute the money. As far as California’s track record getting its funds to borrowers, the state has been “nimble,” and “responsive,” said Sitkin, of the National Housing Law Project, which is monitoring all of the states’ programs.

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