State program offers major relief to COVID-stricken homeowners in Stanislaus County
For homeowners with a financial hardship due to the COVID-19 pandemic, the state has a program to help catch up with mortgage payments and property taxes that are past due.
The Stanislaus County website is promoting the property-tax assistance offered in the June expansion of the California Mortgage Relief Program.
The American Rescue Plan Act in 2021 included $9.9 billion for a pandemic assistance program to help distressed U.S. homeowners, with $1 billion allocated for California.
A program expansion in June extended the property-tax relief to homeowners who don’t have a mortgage or have stayed current on mortgage payments but owe past-due property tax. It also raised the income eligibility limit to 150% of a county’s median income, or to $119,550 for a family of four in Stanislaus County.
Donna Riley, county treasurer-tax collector, said Tuesday that homeowners meeting the eligibility requirements can receive up to $20,000 for paying past-due property taxes. More than 2,800 homeowners in Stanislaus County are behind on paying their property tax bills.
The state program also grants up to $80,000 for a homeowner to catch up on house payments and keep their home out of foreclosure.
Whether it’s help with overdue mortgage payments or property taxes, participating homeowners never need to repay the funds. There is no cost for the application.
Riley said the relief is not only for people who were financially impacted by a serious case of COVID-19 illness. The program also assists people who fell behind because their employer was shut down by the pandemic or they were without a steady income for a while.
“They can get up to $20,000 to cover (past-due) property taxes,” Riley said. “That has to be relief for people who are struggling.”
Relief funds distributed to counties
The California Mortgage Relief Program website says 3,480 households in California have been approved for $114 million in funds, an average of $32,800 per household.
In Stanislaus County, 57 households have been granted a total $1.49 million in assistance, an average of $26,110 per household.
The program has approved $2.9 million for 111 households in San Joaquin County, or $26,569 per household, and $690,187 for 31 applicants in Merced County, or $22,264 per household.
The one-time funding is for eligible people who own a single-family home, a condominium or manufactured home. To be eligible for mortgage relief, homeowners who suffered financial hardship tied to COVID-19 must be two or more payments behind prior to June 30.
Help with property taxes is available for homeowners who were one or more payments behind before May 31 and are currently past due.
During the application process, homeowners provide the facts about their COVID-related financial struggles after Jan. 21, 2020. They’re expected to provide mortgage and bank statements, income documentation and other paperwork.
According to the program rules, an applicant can’t have cash or assets on hand, excluding a retirement account, that is $20,000 more than the relief funds requested. As an example, a homeowner who needs $30,000 to catch up on house payments can’t have $50,000 or more in assets.
The program advises applicants to ask their tax professional about effects of a relief grant on income tax or an IRS mortgage deduction.
Tax delinquency rate is up
Riley said if property taxes are unpaid for five years, the county will sell the home at a tax-default sale to recover the taxes. The county office didn’t have a total for past-due taxes owed by the 2,800 homeowners, but it’s not enough to impact the county budget, Riley said.
The percentage of county property taxes that are delinquent rose from 4.96% the year before the pandemic to 5.53% and 5.24% the first two years of the COVID-19 scourge. The delinquency rate was 5.7% in the 2021-22 fiscal year that closed June 30.
“I completely support residents of Stanislaus County accessing these programs and using them if they need assistance,” Riley said. “We don’t want to put anyone out of their home.”
Riley also mentioned a program established years before the pandemic that postpones property taxes for low-income seniors who own their homes.
For those who qualify, the state will pay annual property taxes for a senior on fixed income, but a lien is placed on the property. When the home is sold, the funds are returned to the state.
“We have a lot of low-income seniors in our area,” Riley said, adding that only about 45 older people are taking advantage of the tax postponement option in this county.
The pandemic hardships for some homeowners have cracked the door open for scammers offering false claims that they can help with mortgage payments or property-tax debt.
The California Mortgage Relief Program advises people to beware of anyone asking for money in advance. The state relief program is a free service, the financial assistance never has to be paid back and the funding is sent directly to the person’s loan servicer or the county tax collector.
This story was originally published August 3, 2022 at 9:28 AM.
