Payoffs and Subordinations

Effective February 1, 2021, the California Housing Finance Agency (CalHFA) will implement new policy criteria for subordination requests associated with Keep Your Home California (KYHC) program liens.

NEW Keep Your Home California subordination policy criteria includes:

• Homeowners with Keep Your Home California liens that are eligible for subordination consideration must pay a $150 non-refundable application fee for each lien being subordinated.
• CalHFA will not subordinate if the KYHC lien balance(s) is less than $20,000.00 in total (CalHFA considers the balances of all outstanding KYHC liens, as applicable).
• CalHFA will not subordinate any KYHC lien with a maturity date that is less than 60 days from receipt of the non-refundable application fee.
• If approved, subordination of an existing Keep Your Home California deed of trust with a 5-year lien term will result in the lien against the property being extended for five (5) additional years from the subordination agreement date.

The California Housing Finance Agency reserves the right to approve or disapprove any KYHC subordination application for any reason that is not prohibited by law.

IMPORTANT: Please be advised that Keep Your Home California (KYHC) will not subordinate or accept less than the total amount of the CalHFA Mortgage Assistance Corporation (CalHFA MAC) lien if the homeowner ceases to be a "qualified homeowner" as defined in the Promissory Note.

ALL requests for subordinations, payoffs, short sales and deeds in lieu must be in writing and include:

• Homeowner name(s), as listed on the Deed of Trust
• Property address, as listed on the Deed of Trust
• Homeowner Identification Number, if available
• Title Company name, address, and title agent's contact information, if applicable
• CLICK on topic below for the additional required documents and information

Required Documents

• KYHC Payoff Request and Homeowner Authorization Form
• Email request for payoff, include homeowner’s name in email subject line
• Homeowner’s forwarding address, if applicable

Send complete package to: payoffs@kyhca.org

Additional Information

• Homeowner(s) must sign the KYHC Payoff Request and Homeowner Authorization Form. Other third party authorization forms will not be accepted.
• KYHC issued payoff demands will include the Homeowner ID Number, total amount due, good through date and banking instructions for where to send payoff funds.
• If the homeowner’s name and Homeowner ID Number are not included in the wire transmittal information, the funds will be returned.

Required Documents

• 1st lien holders' recent mortgage statement or payoff statement
• Appraisal or BPO document that the 1stnlien holder is using to determine the value of the property
• We will require the FHA HUD form 90045-Approval to Participate, if the 1st mortgage is an FHA loan
• KYHC Payoff Request and Homeowner Authorization Form
• Email request for payoff, include homeowner's name in email subject line
• Fully executed purchase contract
• Estimated Settlement Statement, Loan Estimate and/or Loan Closing Disclosure
• Preliminary Title Report
• Copy of servicer-approved short sale agreement
• Homeowner signed hardship letter
• Homeowner's forwarding address
• Additional documents may be required on a case by case basis

Send complete package to: payoffs@kyhca.org

Additional Information

• Non-Arm’s Length Transactions are not allowed.
• Homeowner(s) must sign the KYHC Payoff Request and Homeowner Authorization Form. Other third party authorization forms will not be accepted.
• KYHC issued short sale payoff demands will include the Homeowner ID Number, total amount due, good through date and banking instructions for where to send payoff funds.
• If the homeowner's name and Homeowner ID Number are not included in the wire transmittal information, the funds will be returned.
• KYHC will not allow seller credits.

Required Documents

• KYHC Payoff Request and Homeowner Authorization Form
• Copy of servicer-approved Deed in Lieu agreement
• Preliminary Title Report
• Homeowner signed hardship letter
• Homeowner’s forwarding address

Send complete package to: payoffs@kyhca.org

Additional Information

• Homeowner(s) must sign the KYHC Payoff Request and Homeowner Authorization Form. Other third party authorization forms will not be accepted.
• KYHC issued deed in lieu demands will include the Homeowner ID Number, total amount due, good through date and banking instructions for where to send payoff funds.

Important Policy Changes Effective February 1, 2021

Required Documents

• CalHFA will not subordinate a Keep Your Home California lien if one or more of the following conditions exist:
  • The KYHC lien balance(s) is/are less than $20,000.00 in total (CalHFA considers the balance of all outstanding KYHC liens, as applicable).
  • The KYHC lien has a maturity date that is less than 60 days from receipt of the non-refundable application fee.
• If approved, subordination of an existing Keep Your Home California deed of trust with a 5-year term will result in the lien against the homeowner’s property being extended for five (5) additional years from the subordination agreement date
• Subordination processing will not begin until the escrow company, title company or lender has completed Steps One and Two, as shown below.
• See the “Additional Information” section below for more guidelines.
• The above referenced policies affect subordination requests as of 2/1/21.
• IMPORTANT NOTICE TO LENDERS, TITLE AND ESCROW COMPANIES who work with homeowners to request/obtain a KYHC subordination: Subordination Escrow Disclosure.

The California Housing Finance Agency reserves the right to approve or disapprove any KYHC subordination application for any reason that is not prohibited by law. 

Step One:

• Homeowners may determine if their KYHC lien is eligible for subordination consideration by calling KYHC. Or, homeowner may work with their lender, escrow or title company to submit a Payoff Demand Request.
• To order a payoff demand, go to Payoff Requests and follow the instructions.
  • Payoff Demand will include outstanding lien balance(s) and maturity date(s).
  • If the lien is eligible for subordination consideration, go to Step Two.
  • If the lien is ineligible for subordination consideration, the homeowner may elect to pay off the lien through the refinance or wait until the lien matures before refinancing.
  • Please do not submit the subordination request documents and/or pay the $150 non-refundable application fee until the Homeowner confirms their lien(s) is/are eligible for subordination consideration OR a Payoff Demand has been received that confirms the lien(s) eligibility for subordination consideration.

Step Two:

• If the KYHC lien(s) is eligible for subordination consideration, Keep Your Home California will require a wired payment of $150.00 for the non-refundable application fee for each lien being subordinated.
• Wire information is provided in the KYHC Subordination Request, Homeowner Authorization and Disclosure Form as a part of Step Three.
• If the wire transmittal does not include homeowner name and property address, the wire will be rejected.
• Do not pay subordination fee through Bank Center Deposit since KYHC is not able to identify the homeowner.

Step Three:

• After payment of the $150.00 non-refundable application fee for each lien being subordinated has been sent to CalHFA-KYHC, the escrow company, title company or lender may submit the following required documents:
  • KYHC Subordination Request, Homeowner Authorization and Disclosure Form
  • Estimated Settlement Statement, Loan Estimate and/or Loan Closing Disclosure
  • Preliminary Title Report
  • Payoff Demand for first mortgage loan
  • Conditional loan commitment or rate lock for new loan – Must reflect rate and term of new loan
  • Overnight mailing label – Fed Ex or UPS
• Send complete package to: subordinations@kyhca.org and include homeowner’s name in email subject line

Due to extremely high volume, please allow at least 3 business days from the date the subordination package is submitted before contacting KYHC for status update. Files are reviewed in date order received.

Additional Information

• Homeowner(s) must sign the KYHC Subordination Request, Homeowner Authorization and Disclosure Form. Other third party authorization forms will not be accepted.
• KYHC will prepare the subordination agreement.
• KYHC may subordinate to ensure qualified homeowners are able to refinance their first mortgage.
• KYHC may subordinate to a refinance that meets its “no-cash out” criteria.
• KYHC will not subordinate if the refinance includes cash to the homeowner which exceeds 1% of the new loan amount or if the refinance includes the paying off of credit card and/or personal debt through escrow.
• KYHC will not subordinate to an open-ended loan, including a Home Equity Line of Credit (HELOC) or a reverse mortgage.
• Subordination request packages sent by mail will not be accepted.
• Subordination request packages must be submitted by the escrow company, title company or lender. Subordination request packages submitted by homeowners will not be accepted.
• KYHC will only release a hard copy of the subordination agreement. (No faxes, scans or emails).
• KYHC will not begin the review of the subordination request package until the $150.00 non-refundable application fee for each lien that is being subordinated has been received and posted.
• Do not pay subordination fee through Bank Center Deposit since KYHC is not able to identify the homeowner.
• KYHC policies are subject to change without notice.

CalHFA will permit the subordination of an existing Keep Your Home California lien if homeowners are approved for loss mitigation by the first mortgage servicer.

Required Documents

• KYHC Loss Mitigation Subordination Request and Homeowner Authorization Form
• Recorded copy of first mortgage Deed of Trust
• Recorded copy of mortgage to be subordinated
• Loan Modification Agreement
• Overnight mailing label – Fed Ex or UPS

Send complete package to: subordinations@kyhca.org and include homeowner’s name in email subject line.

Additional Information

• Homeowner(s) must sign the KYHC Loss Mitigation Subordination Request and Homeowner Authorization Form. Other third party authorization forms will not be accepted.
• KYHC will prepare the subordination agreement.
• KYHC will only release a hard copy of the subordination agreement. (No faxes, scans or emails).
• KYHC policies are subject to change without notice.
• The California Housing Finance Agency reserves the right to approve or disapprove any KYHC subordination application for any reason that is not prohibited by law.

The subordination agreement or demand for payoff, short sale or deed in lieu will be provided within 10 to 14 days from the date of a complete request.

If you have questions about the KYHC program, we recommend you review our Frequently Asked Questions page.

If you need to speak with a KYHC representative, please call (888) 953-3722 Monday through Friday from 8:00 a.m. to 4:00 p.m PST.