How the Hafa Program Works

The Home Affordable Foreclosures Alternatives Program (HAFA) is an off-shoot of the Home Affordable Modification Program (HAMP) and is a government backed way for servicers (mortgage lenders) to allow deeds-in-lieu or short sales for defaulting homeowners instead of a foreclosure on the property. 

A deed-in-lieu is an agreement to give the deed (ownership) back to the original lender in exchange for a release of the debt you owe. A short sale, as an alternative to foreclosure, is a sale of the property which falls short of the amount due on those properties’ mortgages. 

When compared to the act of foreclosure on a person’s home, these are positive secondary options for the homeowner. HAFA is for homeowners who applied to HAMP, but were unable to meet their loan criteria program. HAFA members thus must still meet HAMP’s eligibility criteria – with a principal residence, first lien mortgage, serious delinquency, an unpaid balance under $729,750, as well as having a mortgage payment over thirty one percent of their gross income.    

The HAFA program provides incentives for not only the homeowner, but the real estate agent and servicers as well.  As “…a Government program that shows a bit more promise,” according to Metro West Daily News writer John McGeough speaking on behalf of the HAFA Program, “it does provide both the banks and borrowers an additional financial incentive to work things out.”  And these incentives come out like such: 

1)  An up to $3,000 cash back relocation assistance stipend goes to the homeowner on completion of the short sale or deed-in-lieu (HAFA Program Brochure). 

2)  A simplified, watered down set of rules during the short sale for the Realtor culminating in a commission that will not be discounted on the HUD-1 (unless, of course, the mortgage lender adds someone to assist the Realtor with the sale).

3)  In addition to getting “bad debt” off the books, the mortgage lenders may receive a $1,000 incentive to cover costs accrued during the short sale or deed-in-lieu. 

To gain more detailed information on the HAFA Program, visit or for an analysis of HAFA in regards to the homeowner, real estate agent, and mortgage lender. For homeowner assistance now, call 1-888-995-HOPE.

With the help of the HAFA program, you’ll be able to get moving in the right direction again. All parties involved will have added incentives to bring this situation to a satisfactory close, with the program providing the best possible way for the homeowner to transition to more affordable housing.