The HAFA Program
Unfortunately, not all struggling homeowners qualify for the federal government Home Affordable Modification Program (HAMP). Therefore the the Home Affordable Foreclosure Alternatives (HAFA) program has been developed. The HAFA program is for homeowners who, although eligible for HAMP, are not able to secure a permanent loan modification or cannot avoid foreclosure. HAFA provides protection and money to eligible homeowners who decide to do a Short Sale or a Deed-in-Lieu (DIL) of foreclosure.
- Homeowners receive $3,000 for relocation assistance.
- Lenders must allow the opportunity for the homeowner to attempt a Short Sale or accept a DIL of foreclosure before following through with a foreclosure.
- Homeowners are fully released from future liability for the first mortgage debt – lenders cannot ask for a cash contribution, promissory note, or deficiency judgment to complete a short sale or DIL. Additionally, junior lien holders (i.e. 2nd mortgages) who participate in the HAFA incentives must also release borrowers from future liability.