The Obama Administration has announced updates to its HAFA Program which will help expand the amount of struggling homeowners that will be eligible for these programs as well as provide additional guidance for loan servicers.

HAFA allows you to transition from a home you can no longer afford. One option under HAFA is being able to do a short sale on your home without having to pay the deficiency balance after you sell it. The HAFA program offers $3000 in relocation assistance.

In March 2012, the following updates were made to the HAFA Program:

  • The deadline for HAFA has been extended. A borrower now has until December 31, 2013 to submit a Short Sale Agreement or a written request for a consideration for a Short Sale Agreement to be eligible for HAFA.
  • There are no longer any occupancy requirements for HAFA eligibility. (Before the update the property had to be occupied as the borrower’s primary residence at some point within the prior 12 months).
  • 2nd liens can now get up to $8,500. (It was $6,000).
  • Servicers can now accept a full payment, if the borrower requests to make a full contractual payment in order to stay current on the loan.

Get more information on the HAFA Program.

See more details on the Updates to HAFA and other Making Home Affordable Programs.


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I thought this was just important as anything else to the changes made - 

 Borrower relocation incentives will be limited to HAFA short sale or DIL transactions
where the property is occupied by a borrower or a tenant at the time the SSA, Alternative
RASS or DIL Agreement is executed and who will be required to vacate the property as a
result of the short sale or DIL. Servicers must determine if a property subject to a HAFA
transaction is occupied by a borrower or tenant who will be required to vacate and may
only authorize relocation incentives for such occupants. Servicers must ensure that the
HUD-1 reflects a payment to the borrower or tenant, when appropriate.

I sure wish the banks could get their !! together.  I had another one tell me today that the borrower was not eligible because he chose to go straight to short sale and not through HAMP, but the guidelines say that they can do this.  I went up the chain and was told that it was up to the Lender (not the investor - it was FNMA) but the Lender.  2nd time I have had this happen.  Did't kill the short sale but they should have been able to go HAFA


Yes, the Borrower still has to be reviewed for HAMP according to the Guidelines even if the Borrower does not want to retain the Property.

A borrower is eligible for HAFA if all the following requirements have been met in the listed
1. Borrower has qualified for a HAMP modification*, based on verified income, but:
 Was not offered a trial modification due to inability to meet HAMP qualifications (for
example, did not pass the NPV test or meet the target monthly mortgage payment ratio);
 Failed to complete the trial period successfully; or
 Became 2 consecutive payments (31 or more days) delinquent on the modified loan; or
 Requests a short sale or DIL
* One exception to the HAMP eligibility criteria regarding property occupancy allows a
borrower to be eligible for HAFA if evidence is provided that he/she (i) had to relocate to a new
job or was transferred by an existing employer more than 100 miles from the property AND (ii)
has not purchased a one- to four-unit property within 90 days prior to the date of a HAFA
2. The borrower has been considered for all other home retention options as per Fannie Mae’s
loan workout hierarchy
3. You have completed an evaluation of the borrower’s financial condition and have
determined that the borrower does not have an ability to contribute meaningfully to reducing
the potential loss on the mortgage loan

Thanks Kevin for the more detailed info and where to find it. These criteria's are FNMA's only which differ from Governments HAFA guidelines.

Debbie, FNMA has different guidelines and you must have been approved by HAMP then defaulted on HAMP. This is different than the government guidelines.


This difference between FNMA and the government HAFA program has been confusing. But you can read the directive from FNMA to see the HAMP requirements before they will allow the HAFA short sale. If the borrower did not qualify for HAMP they would have to go the regular short sale route under FNMA guidelines.

I am trying to understand these and if anyone has any input feel free to share-

Here is more of the amended changes-

A loan may be eligible for HAMP Tier 2 if the loan has not previously been modified under HAMP Tier 2 and the loan satisfies the HAMP basic eligibility criteria (origination date on or before January 1, 2009, documented hardship, one to four-unit property, unpaid principal balance (UPB) limitations and not condemned).

Ok I got that section…..


In addition, one or more of the following may apply:


The borrower is evaluated for HAMP Tier 1 following the Effective Date but fails to satisfy the eligibility requirements for a HAMP Tier 1 modification (e.g., the loan is not secured by an owner-occupied property or the borrower’s pre-modification monthly mortgage payment is below the minimum 31 percent front end debt-to-income (DTI) ratio) So if they attempt a loan mod and fail the waterfall analysis because payment is under 31% then they can go to a HAMP 2.0 but if the ratio is under 31% what would HAMP 2 be able to offer? Is it to allow them to be apporved for HAMP so they can be offered a HAFA?  I am lost here- help or underwriting requirements for a HAMP Tier 1 modification (e.g., the servicer cannot achieve the target monthly mortgage payment ratio without excessive forbearance or the result of the NPV test is negative).


For real?  Short Sales have gotten so easy lately, any nubie thinks he can do a short sale without any training at all.  And half the time they are right.  Why would I help them?

Thank goodness some files still find problems so all this experience isn't for nothing.  :)

I have closed 2 FNMA in the past year that went straight to HAFA - never applied for HAMP and were not relocating -

I hear you Debbie, I have two right now, both sellers FNMA, both denied HAMP. 1 seller moving forward with HAFA and we are closing at month end, the other seller got denied HAFA, regular short sale closing at month end. Same servicer.


Closed a FNMA HAFA in January, same thing seller got declined for HAMP, but moved right to HAFA. Same lender as above, I brought this file up to management when my above second seller got declined for HAFA as this seller was almost identical in income and circumstances. Was told the seller should not have been approved for HAFA as the servicer will not get paid on that transaction from investor. I seriously believe it is all left up to the individual interpretation of who you are working with at the time at the servicer.It is anything but consistant.


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