HAFA is an official government program for short sales that allow sellers to receive a $3000 credit at closing of escrow to help homeowners get back on their feet.  There are multiple steps that need to be taken to qualify and not everyone is eligible. First you must apply for the HAMP Program (A Loan Modification Program).  If you are denied from the HAMP Program then you will be eligible to apply for the HAFA Program.  Here are a few qualifications that one must meet to be qualified:

  1. You live in the home or have lived there within the last 12 months.
  2. Your first mortgage amount must be less than $729,750.
  3. You have not purchased a new house within the last 12 months.
  4. You originated the mortgage before January 1st, 2009.
  5. You have a documented financial hardship.
  6. You must not have been convicted within the last 10 years of felony larceny, theft, fraud, forgery, money laundering or tax evasion in connection with a mortgage or real estate transaction.

HAFA also allows the deficiency of your mortgage to be forgiven. (A deficiency is what you own on your mortgage minus the amount you sold it for example: If you own $150,000 on your mortgage and you sell it for $100,000, the deficiency would equal $50,000).  Unlike conventional short sales, HAFA guarantees your servicer will waive the deficiency.   This in additions to the 2007 Mortgage Debt Relief Act (which allows one to not have to pay sales tax on a short sale deficiency since it is considered income) allows for the homeowner to save thousands of dollars.

You ask, why would the government do this?  They do not want you to foreclose.  Foreclosure will hurt your credit.  A short sale will help you get back on your feet financially much quicker so you can contribute to the economy and the Government is looking to pay hard cash for this to happen.

This program does have an end date, so if you are interested in applying or looking for more information you can call Steve Trang at 480-266-9960.

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  1. “A short sale will help you get back on your feet financially much quicker so you can contribute to the economy and the Government is looking to pay hard cash for this to happen.” – This is a huge help for those financially struggling to keep up with their mortgage payments. The government should create a department/agency to assist these homeowners who supports short sales. Thanks for the info!

  2. Great article! I have never heard of this program. I will have to look into it more closely. We don’t have too many short sales in Bucks County, but definitely go to know that something like this exists.

  3. Great article! The government should have more programs like this. I think it’s a great way to help people who don’t want to have to foreclose.

  4. Key West Broker Rudy says:

    It’s great to find a blogger out there that actually offers some terrific and helpful information on the market today. We tend to stick to our own market but we’re beginning to widen our blogoscope to include more. We have guest blog opportunities if you are inclined.

  5. A very nice govt program on HAMP and HAFA. Which would helpful for most of them in the loan modification.

  6. While the qualification process can be a bit cumbersome, the HAFA program is a good one. No one believes that foreclosing is the option if an alternative is available.

  7. Anything that helps hard pressed people in these challenged times is to be applauded. Government agencies need to takes steps like this to help to encourage buyers and sellers and assist with recovery.

  8. This sound like a great program as foreclosures are just bad for everyone, the owner, the bank, the economy. Has anyone seen one of these go through, just asking because of stories we’ve heard about unsuccessful attempts for a HAMP loan. I do not know if it effects this program, but the tax-exempt loan forgiveness is going away at the end of 2012 unless renewed.

  9. I’m a big fan of the HAFA program. As has been said by those before me, it can be difficult to wade through the process, but I think it’s a good alternative.

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