The California Housing Finance Agency yesterday announced that they will be allocating up to $700 Million in a new Federal Program to help California’s neediest homeowners struggling with mortgages payments remain in their homes. This funding alone will not solve the significant problems in the housing market that California families face, but combined with other initiatives by state, local and federal governments as well as the private sector, this will contribute to stabilizing California’s housing market.

This follows an announcement by the Obama Administration that CalHFA is one of five state housing finance agencies slated to receive a total of $1.5 billion from the federal government’s Emergency Economic Stabilization Act of 2008. In addition to California, the funds will support efforts in Arizona, Florida, Michigan and Nevada. All five states have seen average home prices decline by 20 percent or more. Under the Obama administration’s plan, the funding can be used for innovative programs to assist unemployed homeowners, homeowners who owe significantly more than their homes are now worth and for those facing challenges associated with second mortgages. The programs will be available to homeowners, regardless of whether their mortgage was initially financed by CalHFA.

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