What The Heck is a HAFA?

HAFA stands for Home Affordable Foreclosure Alternatives and it is part of the Making Home Affordable program created by the Obama Administration to help homeowners avoid foreclosure.

Unlike most features in this program, HAFA is used when staying in the home is not affordable or is too much of a burden to bear and a short sale is needed.

In order to truly understand HAFA, you need to know that its is a supplement to a program called HAMP (Home Affordable Modification Program).  The goal of this program is to keep distressed homeowners in their homes through a loan modification.  Because there is a large number of homeowners that can not qualify for a loan modification, have defaulted on a loan modification, or just need to sell, the HAFA program was introduced as a way to “exit gracefully” in their words.

The features and benefits to a HAFA short sale are many…

It Pays Not To Walk Away

$3000 is paid to the seller from the proceeds of the sale for relocation expenses, although how that money is spent is not tracked.  Other features include:

  • pre-negotiated sales price when marketing the home
  • no deficiency balance due
  • opt in even if you qualify for a loan modification
  • 30 day decision on eligibility
In short, the seller gets $3000 and complete relief of debt (there may be tax consequences). Plus the process is designed so that when an offer is made on the home, the buyer doesn’t have to wait several months for a decision.

Investors Need Not Apply

The HAFA program is for owner-occupied (or recently vacated) properties only.  Some additional requirements are:

  • A documented financial hardship
  • Mortgage must be less than $729,750
  • Must not have purchase a new home in the last 12 months
  • Mortgage must have been originated prior to Jan. 1, 2009
There are other conditions and each Mortgage Servicer has their own requirements for consideration.  An experienced short sale negotiator will be able to help you navigate the process.

What is needed to be considered for HAFA?

according to the makinghomeaffordable.gov website,

Homeowners must be evaluated for HAFA within 30 calendar days of the following:
  • The borrower does not qualify for HAMP.
  • The borrower does not successfully complete a HAMP Trial Period.
  • The borrower is delinquent on a HAMP modification.
  • The borrower requests a short sale or Deed-in-Lieu of Foreclosure.
However, before evaluating a homeowner for HAFA, a participating servicer must first consider that homeowner for other loan modification or retention programs that they offer. In addition, pursuant to the servicer’s policies, every eligible homeowner must be considered for HAFA by a participating servicer before the homeowner’s loan is referred to foreclosure and before the servicer may allow a pending foreclosure sale to continue.
Northwest Debt Management believes that the HAFA short sale is one of the best solutions for distressed homeowners who need to sell.  The paperwork can be heavy up front, but the result is a much faster short sale once an offer is made. The relocation payment combined with the complete forgiveness of debt are a huge benefit to the seller.
Your thoughts, comments and questions are welcome below.


  1. […] tremendous passion for defending those who can’t defend themselves.  This is why I push for HAFA, BofA’s Co-op, or the Chase Short Sale Outreach Program whenever […]

  2. […] It is unclear as to why they are offering an incentive that goes so far and above other short sale programs. So far Chase has offered anywhere from $10,000 to $20,000 as an incentive for sellers to do a short sale.  Much higher than the $3000 sellers get for a HAFA short sale. […]

  3. […] short sale programs like HAFA, require all participating lenders to waive the balance. There are also short sale help programs […]