What is the Home Affordable Foreclosure Alternatives Program?
The Home Affordable Foreclosure Alternatives Program (HAFA) is a federal government initiative in Washington State to help homeowners avoid foreclosure. HAFA provides eligible homeowners the opportunity to transition out of their mortgage through a short sale or a deed-in-lieu of foreclosure. A short sale is when homeowners are allowed to sell their home for less than the remaining balance of their mortgage. If a short sale fails, a deed-in-lieu of foreclosure (DIL) allows homeowners to voluntarily turn in their deed to the lender. The program is designed to help homeowners who may not qualify for other foreclosure prevention programs, such as, the Home Affordable Modification Program (HAMP). The HAFA program assists those homeowners in avoiding a foreclosure, which would damage their credit, by offering them a less damaging solution. HAFA is available to homeowners who have a loan owned or guaranteed by Freddie Mac or Fannie Mae, and have a financial hardship, such as, job loss, divorce, death of a spouse, illness, or reduced income. The homeowner must also be at least 90 days delinquent on their payments and meet certain other criteria, as specified by the lender. Homeowners who successfully complete a short sale or a DIL are eligible for up to $10,000 in relocation assistance. HAFA provides an alternative to foreclosure, which can help homeowners heal from the financial hardship and avoid potential legal action from their lender.
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