SACRAMENTO, Calif.--(BUSINESS WIRE)--
For every dollar issued to help homeowners through the California Housing Finance Agency’s (CalHFA) Keep Your Home California homeowner assistance program, a total of two dollars worth of economic activity is preserved within the state’s economy, according to a new report from the University of South Carolina’s Darla Moore School of Business.
The Economic Impact of Keep Your Home California: A Statewide and Regional Analysis indicates the federally-funded Keep Your Home California has a far-reaching effect on the California economy beyond helping homeowners, preserving $2.5 billion worth of economic activity during its first six years by preserving jobs, tax revenue, and property values of nearby homeowners.
“A strong and vibrant housing market is a critical component of any healthy economy,” said report author Dr. Joseph C. Von Nessen, a Research Economist at the University of South Carolina, Darla Moore School of Business and an expert on similar government programs. “Housing is not only one of the largest sectors of the economy, but individuals who live in stable housing environments also experience many economic and social benefits.”
Statewide, Keep Your Home California preserved more than $1.1 billion in property value, saved about 8,100 jobs which generated $441 million in employee income, and protected $81.3 million in tax revenue from early 2010 through 2015, according to the report.
“Keep Your Home California is making a difference to homeowners, their neighbors, and their communities as well as California businesses and the entire state,” CalHFA Executive Director Tia Boatman Patterson said. “Through the economic ripple effect, Keep Your Home California has not only helped those directly assisted by the program, but also many others – including employees who kept their jobs and small-business owners who maintained their customers. Neighborhoods, communities and the state have all benefited from the program.”
The five Keep Your Home California programs available to homeowners struggling with financial hardships have been designed to address a variety of situations. Options range from covering mortgage payments for out-of-work homeowners to lowering the outstanding principal balance and reinstating past-due payments.
Each of the Keep Your Home California programs helps homeowners – and the state’s economy – in unique ways. For example, the Unemployment Mortgage Assistance Program had the largest impact at $1.16 billion, while the Mortgage Reinstatement Assistance Program had $4.35 of economic benefit for every $1 issued. For a full breakdown of each program’s impact, please see the Program Impacts Fact Sheet.
Keep Your Home California was established in 2010 after the state received $2 billion from the U.S. Department of Treasury’s Hardest Hit Fund. The program has assisted more than 69,000 homeowners and disbursed $1.58 billion in funding through December 2016.
“The Hardest Hit Fund was designed to prevent avoidable foreclosures and stabilize housing markets in communities hardest hit by the Great Recession,” said Mark McArdle, Treasury’s Deputy Assistant Secretary of Financial Stability. “This report shows that California’s program worked as intended and homeowners up and down the state are better off for it.”
Keep Your Home California was allocated an additional $383 million in early 2016. The program ends when the funds are depleted or on the program sunset date of December 31, 2020, whichever comes first. Keep Your Home California anticipates that all program funds will be exhausted before the end of 2020.
Homeowners seeking more information about Keep Your Home California should call 888-954-KEEP (5337) between 7 a.m. and 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays, or visit www.KeepYourHomeCalifornia.org. Representatives can take applications in virtually any language through a translation service and there is never a fee for any Keep Your Home California services. A Spanish-language version of the website is also available at www.ConservaTuCasaCalifornia.org.
Dr. Joseph C. Von Nessen is a Research Economist in the Division of Research at the University of South Carolina’s Darla Moore School of Business where he specializes in regional economics, regional economic forecasting, and housing economics. He regularly conducts a wide variety of economic impact analyses, feasibility studies, and independent market research projects for clients in both the private and public sector. Click here for his full biography.