The California Association of REALTORS (CAR) has rolled out a new mortgage protection program for first time homebuyers, effective April 2, 2009. This program provides up to six months of mortgage protection, and is available to first-time homebuyers who lose their jobs due to layoffs, as long as they purchased their homes through a licensed California Realtor.

CAR’s Housing Affordability Fund (commonly called CARHAF) has allocated $1 million towards this Mortgage Protection Program, and estimates that up to 3,000 families will benefit from this program this year. The program provides up to $1,500 per month for 6 months to help pay the mortgage payment when there is a job loss due to a layoff. Co-borrowers are also eligible for the program, with benefits available up to $750 per month.

According to CAR President James Liptak, “The Mortgage Protection Program was developed to help ease the anxiety of consumers who are concerned about potential job loss and its impact on their ability to pay their mortgage should they purchase a home. It also provides peace of mind to those buyers who are actively searching for a home.”

Qualifications for this mortgage protection program are as follows:

• Be a first-time home buyer – someone who has not owned a home in the last three years.
• Open escrow April 2, 2009, or later, and close on or before Dec. 31, 2009
• Use a California REALTOR® in the transaction
• Purchase the property in California
• Be a W-2 employee (cannot be self-employed)  
• Apply for the program through their Realtor

This program allows first-time home buyers a level of protection and peace of mind that they may need in order to buy a home in a market where job stability may be a concern. Other incentives are available to first-time homebuyers this year as well, including the $8,000 federal tax credit and the $10,000 state tax credit for new-home buyers.