Qualifying for HAFA

August 31, 2010
HAFA, the second part of the government's "Making Home Affordable" initiative is the Home Affordable Foreclosure Alternatives (HAFA).
To qualify for HAFA, the borrower and the lender must first have made an attempt to modify the borrower's loan. If a modification is denied, then a borrower may be eligible for HAFA.
To be eligible for HAFA the loan must be
1. for the principal residence of the borrower
2. a first lien mortgage originated before January 1, 2009
3. delinquent or will be in default in the reasonably foreseeable future
4. a monthly payment, including PITI, condo association fees, homeowners association fees and any other escrow payment shortage amounts, is more than 31% of the gross income of the borrower.
5. a current unpaid principal balance equal to or less than $729,750.
While these are the criteria stated in the HAFA program literature, borrowers are finding that some lenders have added additional criteria which they use to deny a HAFA short sale.
If you are denied and you feel you meet these basic criteria, you could contact http://www.makinghomeaffordable.gov/