Good news for California homeowners impacted by recent natural disasters — Governor Gavin Newsom has proposed a $125 million mortgage relief program aimed at helping families avoid foreclosure while they focus on recovery.
A Lifeline for Homeowners in Crisis
Natural disasters don’t just destroy homes — they disrupt lives. In response, Gov. Newsom has introduced a relief package designed to help homeowners whose properties were destroyed or severely damaged by disasters like wildfires, floods, and more.
The $125 million plan will provide direct mortgage assistance to affected homeowners, helping them avoid foreclosure during an already challenging time.
“As survivors heal from the trauma of recent disasters, the threat of foreclosure should be the last thing on their minds. This disaster mortgage relief program would help lift this burden and give families more time to focus on recovery,” said Gov. Gavin Newsom in a public statement.
What’s Included in the Relief Package?
The proposal breaks down into two major components:
$100 Million in Direct Mortgage Assistance
Targeted help for homeowners facing foreclosure due to damage or destruction of their homes from natural disasters.
Designed to provide immediate relief, giving families the breathing room they need to rebuild.
$25 Million to Expand Counseling Services
Funding will also extend an existing mortgage counseling program.
Homeowners can get help navigating FEMA disaster assistance, insurance claims, and understanding their mortgage options post-disaster.
This proposal will utilize existing mortgage settlement funding, ensuring it won’t impact the state’s proposed 2025-26 budget.
Who Qualifies for This Relief?
If you’ve been impacted by a natural disaster in California since 2023, you could be eligible. This includes survivors of:
Park Fire
Franklin Fire
Palisades Fire
Eaton Fire
The California Housing Finance Agency (CalHFA) will administer the program, managing both the direct mortgage relief and counseling services.
The plan is currently under review and will be discussed at the next CalHFA meeting on February 20. If approved, more detailed eligibility guidelines will follow.
Insurance Woes Add Another Layer of Stress
While mortgage relief could soon be on the way, many California homeowners are still battling insurance hurdles.
State Farm General, California’s largest home insurer, recently requested a 22% rate hike citing financial strain from recent wildfires — a request that was rejected by California Insurance Commissioner Ricardo Lara.
But that’s not the end of it. State Farm had previously sought additional rate hikes in June, including:
30% increase for homeowners
36% increase for condo owners
52% increase for renters
These rate hikes are still pending, leaving many homeowners uncertain about future coverage and costs.
To make matters worse, State Farm hasn’t been accepting new insurance applications in California for business or personal property since 2023. Other insurers are following suit, leading to a tightening market for homeowners in need of reliable coverage.
What Can Homeowners Do Now?
If you’ve been impacted by a natural disaster and are worried about foreclosure or rising insurance costs, preparation is key.
Stay informed about the mortgage relief proposal and upcoming CalHFA updates.
Work with local mortgage experts who can help you understand your options and prepare for possible assistance.
Explore existing disaster relief programs, including those offered through FEMA and CalHFA, even before this new package is approved.
At Best Option Mortgage, we’re here to help homeowners navigate tough times. Whether you're exploring mortgage relief, refinancing options, or just need guidance, we’re ready to assist.
Need help understanding your mortgage options? Contact Best Option Mortgage today — we're here to support you every step of the way.