What is HAFA and Why Should You Care?

By
Real Estate Agent with RE/MAX Exclusive Collection

I've been getting a lot of questions lately about the HAFA Program and how it related to short sales, and why people should pay attention to it if they have been thinking of selling their home.  There are loads of other websites out there that explain and define the HAFA short sale program, but this is my attempt at a very clear and concise explanation. 

What is the HAFA Program?

HAFA stands for Home Affordable Foreclosure Alternatives, and it is a short sale program that the federal government has put into action to help homeowners who want to avoid foreclosure.  It helps them by offering financial incentives to homeowners who successfully complete a HAFA short sale.

What are the benefits of the HAFA Program?

The HAFA Short Sale program is the quickest option for a short sale decision, period.  It also guarantees that the deficiency will be waived, which means that 100% of your mortgage debt will be settled and no legal action can be taken against the homeowner for the oustanding mortgage debt.  This is done without any cash contribution or promissory note from the homeowners.

The most eye-catching part of the HAFA short sale program is the $3000 cash at closing.  This is to help the homeowners relocate to their new home.  Icing on the cake for this program is the fact that all foreclosure proceedings will be put on hold, subjet to specific conditions.

What are the requirements of the HAFA Program?

There are a few extensive requirements that must be met before a homeowner will qualify for the HAFA short sale program:

  • Homeowner has exhausted all loan modification options and/or has decided to pursue a short sale or deed in lieu of foreclosure
  • The property is the homeowner's primary residence (sorry, investors!)
  • The mortgage originated on or before January 1 2009
  • The mortgage is delinquent, or delinquency is foreseeable
  • The mortgage has an unpaid principal balance less than $729,750 (for single-unit properties)

How do I start the HAFA Program process?

The HAFA Program can be initiated by your short sale professional of choice (shameless plug here!) when you are ready to put your home on the market.  At Kara Homes, we have all of the necessary paperwork and will help you complete the process, and then find a buyer for the home and negotiate the short sale on your behalf.  All this is at no cost to you, and if you qualify for the HAFA Program, you'll be issued your $3000 check at closing.

Naturally, every short sale is different; so if you'd like to chat with me about your specific situation, I'd love to hear from you.  If I can help, I would love the opportunity!  If I can't, I will try to put you on the right path to someone who can, or explain to you what your other options might be.

There is a lot of short sale fact and fiction out there; know the pros and cons completely before making your decision.  An educated decision is always best, so let us help you make one!

Comments (2)

Michael Kara
RE/MAX Exclusive Collection - Orlando, FL
Central Florida Short Sale Expert

Thanks for your kind words, Luz!  It was kind of tough to wade through the legal jargon when I first began studying the HAFA program as well, but I feel that I have a very good understanding of it now.  What's tough is that they continue to shift the rules, guidelines and qualifications of the program because it's so new and they are trying to get it just right.  Each tweak that they make to it really affects the homeowners that they're trying to help, so keeping it all straight is pretty important.

Jul 21, 2011 04:32 AM