Home Affordable Foreclosure Alternatives (HAFA) Short Sale Update

Originally Published: 6/19/2012

Effective June 1, 2012, the following changes were implemented in the HAFA Program:

  • TIME FRAME EXTENDED: The program has been extended to Dec. 31, 2013. The HAFA short sale can be initiated up to Dec. 31, 2013; however, the transaction must have a closing date on or before Sept. 30, 2014.
  • ELIGIBILITY UPDATED: Occupancy requirements for HAFA eligibility have been removed; however, the property can’t be owned or secured by a business entity.
  • SECOND LIENS: The maximum amount that may go to the second lien holder has been increased from $6,000 to $8,500.
  • RELOCATION ASSISTANCE:
    • HAFA relocation assistance of $3,000 will be paid only to the primary resident (borrower or occupant) of the property at time the agreement is executed. The resident must vacate upon closing. Vacant properties are not eligible for HAFA relocation assistance.  Nonborrowers (tenant, legal dependent, parent or grandparent) can now qualify if occupying the property and must vacate upon closing.
    • Any money available from additional incentive payout opportunities must be paid to the borrower. The HUD-1 must reflect the breakdown.
    • The borrower will also be responsible for requesting and managing the tenant relocation assistance, including submitting required proof of occupancy and other documentation.

Please contact our office if you have any questions.

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