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The Home Affordable Foreclosure Alternatives (HAFA) program is designed for homeowners who cannot afford their mortgage payments and are looking to transition to more affordable housing.

Requirements for Eligibility

HAFA alternatives are available to HAMP-eligible borrowers who: 1) don’t qualify for a Trial Period Plan; 2) don’t successfully complete a Trial Period Plan; 3) miss at least two consecutive payment during a HAMP modification; or, 4) request a short sale or DIL.

Two Options with HAFA

In HAFA there are two options for homeowners seeking to transition out of their mortgages:

Short Sale – the mortgage company allows the homeowner to sell their house for an amount that falls “short” of the amount still owed.

Deed-in-Lieu (DIL) of Foreclosure – The mortgage company allows the homeowner to give back the title, thus transferring ownership back to the mortgage company.

Comfortable Transition

HAFA can simplify and streamline both the short sale and DIL processes by providing a standard process flow, minimum performance timeframes, as well as standard documentation.

Either with a short sale or with DIL HAFA offers benefits that can help make the transition as favorable as possible:

  • Free advice from HUD-approved housing counselors and licensed real estate professionals is available.
  • HAFA short sales completely release you from your mortgage debt after the property is sold, unlike conventional short sales. What this means is that the homeowner is no longer responsible for the amount that falls “short” of the amount still owed, and the deficiency is waived by the servicer.
  • With a HAFA short sale, the mortgage company works with the homeowner to determine an acceptable sale price.
  • HAFA will have a less negative effect on your credit score than foreclosure or conventional short sales.
  • HAFA may provide $3,000 in relocation assistance when the homeowner closes.
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