This week, Gov. Gavin Newsom announced a new proposal to create an over $125 million mortgage relief program to assist homeowners whose homes were destroyed or severely damaged by recent natural disasters, placing them at risk of foreclosure.

The proposal, approved this week, also includes funding to extend an existing counseling services program which would help affected homeowners navigate their recovery.

The package utilizes existing mortgage settlement funding, and would not impact the proposed 2025-2026 budget.

“As survivors heal from the trauma of recent disasters, the threat of foreclosure should be the last thing on their minds,” said Newsom. “This disaster mortgage relief program would help lift this burden and give families more time to focus on recovery.”

The package will be administered by the California Housing Finance Agency, or CalFHA, and includes over $100 million in direct mortgage assistance, with an additional $25 million to extend an existing program that provides mortgage counseling and serves survivors by offering guidance on Federal Emergency Management Agency, or FEMA, disaster assistance and other related needs.

The program will provide mortgage relief for homeowners at risk of foreclosure and whose property was destroyed or substantially damaged as a result of declared emergencies since Jan. 1, 2023.

The proposal was approved at CalHFA’s meeting on Thursday.

Survivors of natural disasters since 2023, including those affected by the Park Fire, Franklin Fire, and the recent Palisades and Eaton Fires, will be eligible for mortgage assistance.

With it now approved, the direct assistance program and eligibility criteria will be developed and announced in more detail.

The governor last month announced that five major lenders — Bank of America, Citi, JPMorgan Chase, U.S. Bank and Wells Fargo — and recently announced that there are now 420 state-chartered banks, credit unions, and mortgage lenders who have committed to offering impacted homeowners a 90-day forbearance of their mortgage payments, without reporting these payments to credit reporting agencies, and the opportunity for additional relief.

Funding for the mortgage relief program comes from settlement funds California secured from big banks resolving allegations of misconduct during the mortgage crisis.