Short sales aren’t what they used to be and, in fact, many homeowners are finding the benefits of using them as an alternative to foreclosure. However, not all lenders will approve a short sale, nor are they all the same. In an attempt to better serve homeowners, the federal government crated the Home Affordable Foreclosure Alternative program to streamline the short sale process.
A HAFA Short Sale
Seeking a short sale under the HAFA program is a bit different than a traditional short sale found through the lender directly. In order to qualify for a short sale under HAFA the mortgage must meet certain criteria. First, the home must be a primary residence that has been occupied for the last 12 months. The borrower must have obtained the mortgage prior to January 1, 2009. The house must be worth less than $729,750 and considered to be underwater on the mortgage, or worth less than what is owed to the lender. Last, the homeowner must be able to demonstrate a legitimate financial hardship preventing them from maintaining their payments.
The HAFA program can also provide additional benefits not found in a traditional short sale. For one, the homeowner can receive up to $3,000 in relocation assistance once the home is sold. The Department of Housing and Urban Development also provide counselors to walk homeowners through the process and answer questions along the way. A HAFA short sale also tends to carry less risk in selling and is not as likely to impact credit as a traditional short sale.
More information on HAFA short sales can be found at: http://www.makinghomeaffordable.gov/programs/exit-gracefully/Pages/hafa.aspx