Home Affordable Foreclosure Alternatives Program - HAFA Short Sale Program

In 2009, the Treasury Department introduced the HAFA program to provide a viable option for homeowners who are unable to keep their homes through the existing Home Affordable Modification Program (HAMP). The HAFA program takes effect on April 5, 2010—although some servicers may implement it sooner, if they meet certain requirement. The HAFA Short Sale Program will end on December 31, 2012.

Basic Overview of HAFA

  • Does not take effect until April 5, 2010
  • Pertains to 1st Lien Non-GSE Mortgages
  • Utilizes borrower’s financial information through HAMP
  • Financial incentives provided to borrowers, servicers and investors
  • Sets limits on lender response time
  • Lender forfeits ability to pursue deficiency judgment
  • Caps claims of subordinate lenders

Requirements of HAFA

A loan is eligible if all of the following conditions are met:

  • Property is borrower’s principal residence
  • Loan is a 1st lien mortgage
  • Originated before Jan 1, 2009
  • Mortgage is delinquent or default is reasonably foreseeable
  • Current unpaid balance is equal to or less than $729,750
  • Borrower’s total monthly mortgage payment exceeds 31% of borrower’s gross income

Incentives of HAFA

  • $3,000 to Borrowers for relocation costs
  • Will be deducted from gross sale proceeds at closing
  • $1,000 to Servicers for administration and processing fees
  • Servicer may not charge borrower any processing fees and MUST pay all out-of-pocket expenses
  • $1,000 to Investors for subordinate lien holder payoff
  • For every three dollars spent to release liens, buyer or investor is reimbursed one dollar – capped at $3,000

Process and Timelines for HAFA

  • Please contact us for a detailed outline of how the HAFA program works specifically for your mortgage lender and your situation.


San Diego Short Sale Experts
Ph: 619-777-6716
2820 Camino del Rio South #316
San Diego, CA 92108 US
BRE License # 01384181 & CA BRE Broker License # 01885775.