The Home Affordable Foreclosure Alternative or “HAFA” is an initiative that was introduced to help struggling Homeowners successfully short sell their home by following a set of established and simplified guidelines. The program does not cover every Homeowner or every Property. See below for more detail. 

Important dates to know when it comes to HAFA:

- Program is effective as of April 5, 2010

- Program expires on December 31, 2012

- Once Homeowner signs agreement with their Servicer they are under the HAFA contract for 5 months (can be extended if mutually agreed upon)

How will HAFA help Homeowners? HAFA has...

- Created a set of standard processes and timeframes - one key timeframe is that lenders will have a maximum of 10 days to respond to buyers offers on a HAFA approved property

- Established financial incentives payable to Homeowners, Servicers and Investors 

- Releases struggling Homeowner from all future liability for forgiven debt (this refers to mortgage balance and NOT potential tax liability – consult with a Tax Professional regarding your tax consequences) 

- Gives the Homeowner (the seller) the ability to receive pre-approved short sale terms before even listing their home

- Keeps the Servicer from reducing Real Estate Commissions as a condition of the approval

- Streamlines Homeowners HAFA eligibility by using information from HAMP analysis

HAFA Eligibility

Below are two sets of eligibility criteria for HAFA. The first is a set of rules for the Homeowner and the second is the set of rules for the Mortgage itself. Keep in mind that HAFA was created so that those who are eligible for HAMP would be eligible for a HAFA assisted Short Sale. 

Servicers have to consider HAMP eligible Homeowners as eligible for HAFA within 30 calendar days of one or more of the following: 

- Does not qualify for HAMP Trial Period Plan

- Does not successfully complete a HAMP Trial Period Plan

- Is delinquent on a HAMP modification by missing at least two consecutive payments

- Requests a short sale or Deed in Lieu

Mortgage must meet the following in order to be eligible:

- The Home must be the Homeowners primary residence 

- The Mortgage must be a a first lien that was originated before Jan 1, 2009

- The Mortgage must be either currently delinquent or default must be reasonably foreseeable

- The current principal balance of the Mortgage must be equal to or less than $729,750

- The Mortgage payment must exceed 31% of the Homeowners gross monthly income

Financial Incentives Provided by HAFA

Homeowners: May receive up to $3,000 in "Relocation Assistance" (help with the cost of moving) after a successful Short Sale or Deed in Lieu. Please check with a Tax Professional to see how receiving this may have tax implications for you. 

How Can I Apply for HAFA?

Click on the link below to verify Lender Eligibility for HAFA:
http://www.makinghomeaffordable.gov/contact_servicer.html