HAFA

Home Affordable Foreclosure Alternatives (HAFA) Program

Page Content

If you can't afford your mortgage payment and it's time for you to transition to more affordable housing, the Home Affordable Foreclosure Alternatives (HAFA) program is designed for you. HAFA provides two options for transitioning out of your mortgage: a short sale or a Deed-in-Lieu (DIL) of foreclosure. In a short sale, the mortgage company lets you sell your house for an amount that falls "short" of the amount you still owe. In a DIL, the mortgage company lets you give the title back, transferring ownership back to them.


In either case, HAFA offers benefits that make the transition as favorable as possible:

• You can get free advice from HUD-approved housing counselors and licensed real estate professionals.
• Unlike conventional short sales, a HAFA short sale completely releases you from your mortgage debt after selling the property. This means you will no longer be responsible for the amount that falls "short" of the amount you still owe. The deficiency is guaranteed to be waived by the servicer.
• In a HAFA short sale, your mortgage company works with you to determine an acceptable sale price.
• HAFA has a less negative effect on your credit score than foreclosure or conventional short sales.
• When you close, HAFA provides $3,000 in relocation assistance.

You may be eligible for HAFA if you meet all of the following criteria:

• You live in the home or have lived there within the last 12 months.
• You have a documented financial hardship.
• You have not purchased a new house within the last 12 months.
• Your first mortgage is less than $729,750.
• You obtained your mortgage on or before January 1, 2009.
• You must not have been convicted within the last 10 years of felony larceny, theft, fraud, forgery, money laundering or tax evasion in connection with a mortgage or real estate transaction.

Your lender and investor must participate. The investor is the entity that supplied the funds for securing your loan. the servicer is the bank that services your loan. FHA, VA, USDA among others DO NOT participate in HAMP or HAFA.

Modification is an attempt to remain in your home and lower your payement or better your overall terms. To do a HAFA short sale you apply simultaneously for HAFA and HAMP. HAFA is to do a short sale and sell your home.

Program ends December 31, 2012.