Home Affordable Foreclosure Alternatives Option
If you are facing foreclosure and have been unable to modify your mortgage, you may be able to get help under the government’s Home Affordable Foreclosure Alternatives Program (HAFA). HAFA offers additional options—a Short Sale and Deed-in-Lieu of Foreclosure (DIL)—to help homeowners avoid foreclosure.
What is HAFA?
HAFA is designed to help homeowners, who can no longer afford their home, avoid foreclosure and resolve their mortgage debt.
HAFA may be an option if:
- You were not eligible for a permanent modification under the Making Home Affordable Program (e.g., you didn’t qualify for a trial mortgage modification, didn’t successfully complete the trial period, or missed at least two consecutive payments during their modification period), and
- Your loan is owned by Fannie Mae or Freddie Mac – or is serviced by a participating mortgage company—if you’re not sure, click the links to check.
For complete details on HAFA eligibility and requirements, go to makinghomeaffordable.gov.
What are the benefits?
- Eliminate your mortgage debt
- Assistance for relocation is available
- Avoid foreclosure
- May be able to get another Fannie Mae mortgage to purchase a home sooner (in as little as 2 years) than if you went through foreclosure (at least 7 years)
How does it work?
If you qualify for HAFA, you’ll go through a process similar to that of a traditional short sale. With HAFA, the sales price is established upfront helping to streamline the process and approvals. If your home does not sell or the short sale is not approved, you may eligible for a DIL.
Next steps
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Gather your financial information—Make sure you have your basic financial and loan information on hand when you call your mortgage company. You’ll need:
- your mortgage statements, including information on a second mortgage (if applicable)
- your other monthly debt payments (e.g., car or student loans, credit card payments), and
- your income details (paystubs and income tax returns).
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Explain your current situation—Be ready to outline your current hardship and explain why you are having trouble making your mortgage payment, the reasons why this is a long-term problem and inform your mortgage company that you want to sell or leave your home to avoid foreclosure. Your mortgage company will need to understand the reasons why you are having difficulty in order to find the right solution for you.
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Contact your mortgage company—Tell them you are interested in selling or leaving your home and you want to see if you qualify for HAFA.
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It’s important to act quickly. Contact your mortgage company to see if you are eligible for a HAFA short sale or DIL. If you need further assistance (before or after contacting your mortgage company), contact a Housing Counselor.
