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.

The HAFA program allows you to sell your primary residence if you are “upside down” or in a “negative equity” position.

HAFA Guidelines:

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?

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).
      • Death.
      • Divorce.
      • 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:

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