If you can’t afford your mortgage payment and it’s time for you to transition to more affordable housing, the Home Affordable Foreclosure Alternatives (HAFA) program is designed for you. HAFA provides two options for transitioning out of your mortgage: a short sale or a Deed-in-Lieu (DIL) of foreclosure. In a short sale, the mortgage company lets you sell your house for an amount that falls “short” of the amount you still owe. In a DIL, the mortgage company lets you give the title back, transferring ownership back to them.
In either case, HAFA offers benefits that make the transition as favorable as possible:
- You can get free advice from HUD-approved housing counselors and licensed real estate professionals.
- Unlike conventional short sales, a HAFA short sale completely releases you from your mortgage debt after selling the property. This means you will no longer be responsible for the amount that falls “short” of the amount you still owe. The deficiency is guaranteed to be waived by the servicer.
- In a HAFA short sale, your mortgage company works with you to determine an acceptable sale price.
- HAFA has a less negative effect on your credit score than foreclosure or conventional short sales.
- When you close, HAFA provides $3,000 in relocation assistance.
You may be eligible for HAFA if you meet all of the following criteria:
- You live in the home or have lived there within the last 12 months.
- 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.
The sooner you seek help, the more options you’ll have. If this is the first time you’ve worked with your mortgage company, they will want to ensure that you have been considered for other options to keep your home before they move forward with HAFA. When it’s time for HAFA, be prepared to provide the following:
If you’ve already received an offer, be prepared to submit these additional forms:
- Alternative Request for Approval of Short Sale (Alternative RASS)
- Executed sales contract
If you have additional questions about getting mortgage help, contact one of our housing experts at 888-995-HOPE (4673). These HUD-approved housing counselors will help you understand your options, design a plan to suit your individual situation, and prepare your application. Research shows that homeowners who work with housing experts like these are more successful and have better long-term outcomes. There is no cost to you for this valuable, around-the-clock service. Help is available in more than 160 languages.
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