After two months of delays, a nearly $2 billion program to help struggling California homeowners is nearly ready to launch.

Phase 1 of the program, under which the government will make direct mortgage payments for eligible unemployed Californians, is expected to begin Jan. 10, the program’s director said Thursday.

The rest of the program – including a “buydown” feature that would reduce loan balances – is expected to begin Feb. 7.

Funded with almost $2 billion in federal dollars, the “Keep Your Home California” program was announced last February. It was supposed to start Nov. 1. The delays have generated criticism from advocacy groups and some elected officials.

The program’s website notes that applications aren’t being accepted yet. A recorded message at the program’s telephone hotline says details of program eligibility haven’t yet been finalized. Callers are urged to continue working with their lenders and not wait for the program to start.

Officials running the program said they’re doing everything they can to implement a complicated system that needs lender cooperation to succeed.

“These aren’t just off-the-shelf programs that we had, that we could just roll out,” said program manager Diane Richardson, the legislative director of the California Housing Finance Agency.

“Do I wish we could have gotten it going a lot sooner? Sure. But I’d rather do it right than do it fast, and I think we’ll do it right.”

She said even the simplest part of the program, in which the agency will make the monthly mortgage payment for an unemployed homeowner, has created logistical problems. For the payments to flow, lenders have to agree to share borrowers’ confidential data with the state agency, she said.

“That’s a fairly sensitive thing,” she said.

The unemployed homeowners can get up to six months’ worth of payments, at up to $3,000 a month.

The total available for that part of the program is $875 million.

Another big piece of the program sets out $800 million to reduce outstanding loan balances. This, too, requires buy-in from lenders; the state will only put in cash if the lenders agree to reduce loan principals.

For every $1 the lenders agree to reduce on a borrower’s balance, they’ll get a $1 match from the state, meaning the borrower’s principal will be reduced by $2.

So far only a few lenders or loan servicers have committed to the reduction phase of the program, but a few have indicated they’re willing to participate. “I do expect to have some servicers on board” when that phase of the program begins in February, she said. Additional lenders are likely to join in the coming months, she said.

A spokesman for the banking industry said he thinks lenders will go along with the balance reduction.

“You keep the borrowers in the house, and you get the matching dollars,” said Dustin Hobbs, spokesman for the California Mortgage Bankers Association.

Hobbs said the entire program will help whittle away at the foreclosure crisis but shouldn’t be viewed “as a cure-all, a one-size-fits-all solution.”

State officials have estimated there’s enough cash, nearly $2 billion, to help an estimated 100,000 low- to moderate-income borrowers.

To Find out Additional Information or see if you qualify, you can go to the website http://www.keepyourhomecalifornia.com/.

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