California's jobless homeowners to get benefits mailing California's unemployed will finally see letters from labor officials about benefits they may be able to get from a $2-billion program, including one that could pay their mortgages for as long as nine months. The money comes from the federal government's Hardest Hit Fund - $7.6 billion in leftover bank bailout money allocated to 18 states devastated by the housing meltdown. California received by far the biggest share, and created a program called Keep Your Home California to channel the assistance to homeowners. The program, unveiled two years ago by the Obama administration, has been up and running in California for more than a year. But because of bureaucratic constraints, this is the first time the state Employment Development Department has mailed information about it to the 1.1 million Californians receiving unemployment insurance. The letters should be arriving in the mail by next week. "The mailing is a very good thing," said state Sen Ted Lieu (D-Torrance), chairman of the Senate Labor and Industrial Relations Committee. But it's long overdue. He said he had learned of the situation by reading a March 2 article in The Times describing the slow disbursement of the Hardest Hit money nationwide. A Times analysis found that the state Housing Finance Agency, which administers the program in California, had provided less than 2% of the $2 billion available by the end of last year. Lieu, whose labor committee oversees the Employment Development Department, wrote EDD Director Pam Harris on March 5 asking why more hadn't been done to promote a housing program that was designed to benefit the unemployed. EDD spokeswoman Loree Levy said the problem stems from U.S. Labor Department restrictions on the use of funds for unemployment insurance. She said federal officials wouldn't allow information on Keep Your Home California to be inserted in the packets sent out to people who apply for unemployment insurance because it would raise the weight of a packet from 2.85 ounces to 3.05 ounces. That would increase bulk mailing costs by 12.5 cents to 20 cents per item, Levy said. Labor Department public affairs officials didn't respond to phoned and emailed requests for comment. Levy said the EDD, which had posted program information on its website, determined that fliers could be inserted at no extra cost in certain follow-up mailings already scheduled to begin at this time. Officials at the California Housing Finance Agency, who had bumped heads with their counterparts at EDD over the mailing issue, said they were pleased. "It's a really fabulous way to get the word out," said Diane Richardson, the housing agency official overseeing the program. Keep Your Home California actually involves four separate programs aimed at jobless homeowners. The state's initial emphasis was on a program that hoped to use $772 million of the federal funds in a principal-reduction matching program. The idea was to encourage banks to write down mortgage balances by providing a dollar-for-dollar match. But Bank of America was the only big bank to sign up for that program, which has been largely stymied in handing out funds. So the emphasis has shifted to providing $875 million to make mortgage payments for the unemployed and $159 million to help homeowners who have fallen behind on their loans make catch-up payments, Richardson said. Though the special mailings will reach all Californians currently in the unemployment insurance program, there is still no way for state labor officials to mail information about Keep Your Home California to future applicants. Housing and labor officials and Lieu said they were trying to find a solution. Lieu said it might be possible to have another government agency or a foundation cover the additional cost of mailing an unemployment packet with an additional information sheet inserted. It might also be possible, Lieu said, to have information on Keep Your Home California printed on EDD envelopes, which wouldn't raise the weight and thus the cost of mailings.