Home Affordable Foreclosure Alternative
HAFA (Home Affordable Foreclosure Alternative) was established (April 5, 2010) to assist America’s Homeowners through these troubled times of decreasing home values and finding a “graceful exit” from a bad financial situation.
You may be eligible for HAFA if you meet all of the following criteria:
- 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.
*Eligibility criteria are for guidance only. Contact your mortgage servicer to see if you qualify for HAFA.
What Does HAFA cost me?
- Nothing, your mortgage company pays your Real Estate Agent.
What does it do for me?
- The HAFA program:
- Allows you to sell your primary residence if you have no equity.
- Allows you to sell without any penalty or commitments to repay your mortgage company the difference or “Non-Recourse“.
- Pays you…the seller…up to $3,000.00 for moving expenses or “Cash For Keys”.
- Pays off your 2nd liens or 3rd liens without any “Re-course” or promise to repay.
How do I apply?
- You must use a Licensed Real Estate Agent from your state to initiate the HAFA process
- The process may require the following:
- Financial Worksheet
- Bank Statements
- Most Recent Pay stubs or Unemployment Documentation
- Hardship Letter of Explanation
- Loss of employment.
- Relocation of employment (100 miles from primary residence).
- Most life altering circumstances that result in a loss or reduction of income.
- 2 years Federal Tax Returns or Explanation
How Long does it take?
- The application process takes up to 10 days from the time all your Short Sale documents are submitted.
- Once a HAFA approval is received, the sale will take from 30 to 60 days to close, much ike a standard sale.
How will my credit be impacted?
- Your credit may report “Satisfied for less than agreed” , “Paid less than agreed”, “Settled”, etc…
- Your credit score is very subjective and based on your specific debt to income ratio.
- Most credit scores are impacted between 50 and 100 points.
- Late Mortgage Payments or Default in payments may have a greater impact.
What if I owe back property taxes?
- In most cases, your mortgage company will pay your late or defaulted property taxes.
Will HAFA pay IRS or State tax liens?
- No, however, the IRS and most states, upon notification and submission of a few documents will allow the property to be sold as long as their is no “gain” to the seller or what is known as a Short Sale.
- Some considerations not covered by HAFA
- Investor owned, 2nd or vacation homes, vacant land
- Strategic Short Sale
- Where you simply want to sell the property to get out from underneath the debt.
- Freddie Mac or Fannie Mae backed loans
- These two government backed entities will have a program that mirrors HAFA but as of this date, the program has not been rolled out by either entity.
Learn more about the HAFA program from this video: