Keep Your Home California Principal Reduction Program

The California home reduction program is a helpful way to prevent high cost homes in your area from becoming obsolete. The program was created to help homeowners save money on their homes by offering them at a low price to upgrade certain features.

The feature offered includes adding an upper floor, re-configuring the space, or expanding the size of the home. Any one of these would cost you around $10,000-$15,000 depending on your initial configuration.

By donating your home to people who need a replacement or expansion, you are helping the community as a whole and saving money in the process. Individuals can then use your property for whatever they desire.

To qualify for the program you must: have been responsible for the purchase and/or donor of the new property acquisition; have met all criteria to be considered a “new” homeowner; have been living in your current residence for at least five years.

How can I qualify for a principal reduction?

To be eligible for a principal reduction, you must have a household income that is at or below the following:

A household income of $500,000 or more

A household income of $500,000 to $999,999

A household income of $100,000 to $499,999

A household income of $100,000 to $249,999
These conditions apply to all households regardless of size. All qualifying households are invited to an open house and meet with a housing counselor. If you want to move into a more affordable home, this can be helpful.

If you want to buy or sell your home and need help in doing so, the California State Housing Bank (Cal State Hous) can help. You can call (818) 715-4176 for more information about this service. He/she will discuss with you your options before making any decisions about buying or selling your home.

What happens if I do not participate in the program?

If you need to replace a window or door due to a fire or burglary, you may be eligible for a replacement window or door through the program.

The California Department of Businessiosn re-supports businesses with new security systems and upgrades. You can apply up to three times per business, so applying more than once would not increase your reward.

To be eligible for the program, you must have at least one window or door and provide at least two different types of coverage such as glass, solid or insulated paneling, and frame or none. You must also pay for at least 50% of the cost of the replacement.

If your home is damaged in an earthquake or wildfire, you may be eligible for a reward from either program. If your home is destroyed, you may be able to replace it with another similar size and location.

Who is eligible?

You can only apply if you have higher household bills that are due to energy or water usage. These include: hot water use, ceiling fan or cooling system use, winter heating needs, summer cooling needs, and other recurring bills.

You do not have to pay your bill until you have used all of the necessary resources to reduce your demand on electricity and water. In order to qualify for the program, you must decrease your monthly bill by at least 15% in total savings.

You can only participate in the program once. If you have more savings left than needed for your new bill, then you can apply for a second time!

The CAIH Home Reduction Program is meant to last between 6 and 12 months. If your home is more than 12 months old, then it does not qualify for the program.

What property are eligible for this program?

The California principal reduction program targets homes in high-poverty areas. You can qualify if your home is in a neighborhood with a poverty level income, or if you are working to improve the area around your home.

Both conditions must be met for you to apply in this program. You must also live at your home and own the property. The property must be used mainly for residential purposes and not commercial or public.

Only one property can be reduced on any given year, so if you want to cut down on your mortgage, you must reapply for the program again. You will need to prove that you are making efforts to reduce your housing costs by owning and living on your property.

This program is meant as a way to help decrease house prices in poor areas, so being eligible does not guarantee that you will reduce your mortgage payments.

How do I apply?

You can apply anytime by going to www.homered or by calling 866-918-4143. There are two ways to qualify for the program: as a new owner-occupied home or as a previously owned home that has been modified and/or improved.

Modifications and improvements can include: A new roof, walls, floor, or conversion to a single family home.

When applying, you must confirm your information through an inspection or similar documentation.

What documents do I need to apply?

You will need to fill out your Home Reduction Program (HPP) application using the blank form found on the website. You can also download a free copy from the website.

There are several documents that you may include on your application, including: proof of employment, proof of housing expenses, receipts for purchases of food and entertainment items, and documents confirming your home’s fire code violations.

If you have recently changed homes or lost evidence of housing expenses, you must re-apply for HPP. The program does not apply to people with previous claims for housing benefits.

You may apply in any month that you do not need housing benefits, but your eligibility is checked annually to make sure no mistakes were made. If there are errors made, then the Housing Authority will give you a credit or refund accordingly.

When will I find out if I am approved?

You can apply as often as you like, but you must be currently in housing or have been accepted for housing as of the date you apply.

To be approved, your home principal reduction program needs to ensure you meet minimum requirements. To be considered a qualified person, you must be: Currently receiving benefits under the household benefits formula (i.e.,Supplemental Food and Clothing Program, Specialized Support Program for People with Disabilities, Housing Assistance Program), Have a clear path to re-housing (i.e.,you are not considered homeless unless re-housing is completed), and Receive at least one favorable review per year (i.e.,you do not fall out of eligibility if you are successful in re-housing).

If your home principal reduction program does not meet these requirements, then it will not prevent homelessness and may even increase your chances of having a hard time staying housed.

What happens after I am approved?

Once you are approved, your home will be monitored for 6 months to ensure it stays below the qualifying criteria. If you make a sale or received financing on a property that meets the criteria, you will be paid.

If your property is not maintained or in need of repair, it will be removed from the program. You will not receive any money for this reason.

If one of your neighbors has a similar property but doesn’t maintain their home or repairs not done, their house is cut off from receiving money.

If one of your properties is evaluated as in need of repair, you will get notified and have time to fix it before it gets cut off.

These checks and changes take place every year so that homes do not exceed the program’s qualifying criteria. This ensures there is enough funds to cover checks and maintenance on homes.

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