Solution Use a community development financial institution, seeded with bank and philanthropic capital and backed by a state loan-loss guarantee, to offer rebuild mortgages with lower liquidity requirements and flexible cashflow underwriting for homeowners who cannot access conventional construction loans after a disaster. Key challenge After the 2025 Palisades and Eaton fires, most displaced households remained unable to rebuild because conventional construction lending requires liquidity and cashflow profiles that underinsured, displaced homeowners cannot meet - leaving them at risk of losing homeownership entirely. Context The January 2025 Pacific Palisades and Eaton fires displaced thousands of Los Angeles households across established urban and suburban residential communities. A survey of more than 2,300 fire-impacted residents found that most families remained displaced as the costs of temporary housing and rebuilding continued to rise. Insurance settlements alone were insufficient, and the conventional construction loan market did not serve borrowers whose income and liquidity had been disrupted by the event. The specific financing gap was identified through FORGE LA, a collaborative initiative to identify financial gaps in disaster recovery, led by The Center by Lendistry, Lendistry's strategic nonprofit partner. Solution in practice In August 2026 Lendistry Home Loans launched the Disaster Recovery Mortgage Pilot, seeded with a USD 15 million commitment from Bank of America and USD 5 million from the California Community Foundation through its Los Angeles Wildfire Rebuilding and Renewal Fund. The pilot lowers liquidity requirements and applies more flexible cashflow underwriting standards while still meeting statutory ability-to-repay requirements, targeting community members at risk of losing homeownership who cannot access construction loan products. It launched shortly after California’s 2026-27 state budget established a USD 100 million Disaster Rebuilding Assistance Program providing loan-loss guarantees and reduced interest rates for impacted homeowners - public risk-sharing that allows the lender to price and underwrite the product. Bank of America positioned the CDFI route as complementary to its own Rebuild Solution for existing mortgage clients (extended forbearance, a line of credit and preservation of the original lower interest rate), recognizing that non-clients needed a separate channel. The Program was announced ahead of applications opening, in early autumn 2026, to give homeowners equitable opportunity to prepare to apply. Impact / outcome USD 20m seed capital for rebuild mortgages backed by a USD 100m state loan-loss guarantee Program; applications open early fall 2026. Next steps Loan applications for the Disaster Recovery Mortgage Pilot will be available in early fall of 2026. Lendistry Home Loans announced the Program in advance of applications opening to allow equitable opportunity for homeowners to prepare to apply, directing homeowners to www.disasterrecoverymortgage.com to learn more and sign up for updates. The pilot is designed to work alongside California's Disaster Rebuilding Assistance Program, a USD 100 million Program established in the 2026-27 state budget providing loan-loss guarantees and reduced interest rates for impacted homeowners, which helps lenders mitigate risk while providing responsible financing to affected communities. This maps directly onto the playbook action area 2a: mortgage lenders and retail banks have the longest financial relationship with any property, often 25 years or more, yet play a limited role in funding resilience today, and examples like this remain exceptions rather than standard practice. Organizations involved Authoring: Lendistry Home Loans Actors: Bank of America; California Community Foundation; The Center by Lendistry; State of California Implementation partners Investors & Banks; Civil Society Organizations; Regulators & Policymakers; Local Governments