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Home Affordable Foreclosure Alternatives

Federal government program offers alternatives to foreclosure. If you’re struggling to make your monthly home loan payments and are worried that you may be heading towards a foreclosure, this federal government program offers alternatives for settling your mortgage debt.

Is the Home Affordable Foreclosure Alternatives program right for me?

Program goal

Home Affordable Foreclosure Alternatives is part of the federal government's Making Home Affordable program. You may qualify for financial assistance to help with relocation costs. This type of short sale may completely release you from your mortgage debt.

With Home Affordable Foreclosure Alternatives (also known as HAFA), we can determine an appropriate list price and start pursuing approvals before you list the property or receive an offer.

Eligibility

You may be eligible for a HAFA short sale if:

Your loan isn't guaranteed by Fannie Mae or Freddie Mac

How do I know?

To find out if your loan is owned by Fannie Mae or Freddie Mac, simply call the toll-free numbers below or use their online lookup tools.

Fannie Mae:

1.800.7FANNIE (8 a.m. to 8 p.m. ET) www.fanniemae.com/loanlookup Opens a new window

Freddie Mac:

1.800.FREDDIE (8 a.m. to 8 p.m. ET) www.freddiemac.com/mymortgage Opens a new window

You took out your mortgage before January 1, 2009

Your mortgage is past due or your loan is current but you believe you’ll miss a payment soon

The amount you owe on your first mortgage is equal to or less than:
- $729,750 for a single-family home
- $934,200 for a 2-unit property
- $1,129,250 for a 3-unit property
- $1,403,400 for a 4-unit property

You're experiencing a hardship such as a reduction of income, medical expenses or a divorce

The property isn't condemned

HAFA eligibility requirements may vary. Learn more.

If you have an FHA loan, try selling your property in an FHA Short Sale.

If a short sale is completed on your property, we'll report that your loan was "paid in full for less than the full balance." Learn more about the potential effect of a HAFA short sale on your credit.

You should contact a tax professional to gain an understanding of any tax implications.

If you don't meet the eligibility requirements for the Home Affordable Foreclosure Alternatives program, you may qualify for the Cooperative Short Sale program. This provides another alternative to foreclosure and also offers relocation assistance. If you aren't eligible for either program, you may want to consider a traditional short sale.

Now that I'm in the process, what's next?

I'm interested in a Home Affordable Foreclosure Alternatives short sale.

First, if you haven't already applied for a Home Affordable Modification, we'll check to see if you meet that program’s eligibility requirements. To do this, we'll need you to update us on your financial information.

Next, if you're not able to keep the property, we'll help you determine if you're eligible for a Home Affordable Foreclosure Alternatives short sale. This may require additional documentation. If more forms are needed, we'll send them to you.

Within 30 calendar days after you've submitted all of your required documents, we'll determine if you meet the program's guidelines and notify you of our decision.

HAFA eligibility requirements may vary. Learn more.

I’m waiting for approval on a HAFA short sale.

We'll work to determine a recommended list price. You may have heard this referred to as the fair market value.

A valuation of the property will be performed at no charge to you. We'll consider the sale price of other properties of similar size in your neighborhood.

We'll also work to gain approvals. Even if you’re pursuing a short sale with us, in most cases there’s a third party, known as the investor, who has ownership of the loan. We’ll need their approval in order to finalize the short sale.

If you have a Bank of America home equity loan or home equity line of credit, we’ll take care of getting approvals for your HAFA Short Sale request.

If your home equity loan or line of credit is with another lender, you'll have to contact that lender and request a Second Lien Release form. The second lien lender will be required to provide us with the appropriate lien release documentation before any offer can be considered. Speak with a licensed real estate agent about other types of liens that may also need approval in order for you to move forward with your short sale.

After the valuation and approvals, you’ll receive a Short Sale Notice with the recommended list price for the property. This notice will be your approval into the program and will provide the terms and conditions to successfully complete the program.

HAFA eligibility requirements may vary. Learn more.

I'm trying to find a buyer.

You're required to work with a licensed real estate professional to market and sell your house.

We strongly recommend working with a real estate agent who's experienced in short sales and who can help guide you through the process. You won't have to pay the commissions of the real estate agent since they will be paid from the sale of the house.

Typically, you'll have 120 calendar days to market and sell your house at the price listed in your HAFA Short Sale Notice. During this time, it's important to:

  • Work with your agent and show your house to as many buyers as possible
  • Keep your house in clean condition
  • Make it available for showings to potential buyers at all times

The short sale must be an arm’s-length market transaction. This means that it's not permissible to sell the house to a family member or anyone else with whom you have a personal or business relationship.

HAFA eligibility requirements may vary. Learn more.

I've received an offer on my house.

Once you receive an offer, your real estate agent will be asked to submit the offer (signed by the buyer) within three business days. We'll then determine if the proposed sale is consistent with the HAFA Short Sale Notice.

For your short sale to be successfully completed, your agent must:

  • Submit any requested documents on time
  • Respond quickly to any counteroffers you receive

Within ten business days of receiving documentation, we'll provide our decision on the offer. If the offer is accepted, we'll provide you with an approval letter releasing the house for purchase. You'll also receive a letter outlining the details of the sale of your house.

HAFA eligibility requirements may vary. Learn more.

The offer on my house was accepted.

In order to complete the sale, we must receive all signed, notarized documents. In addition, all borrowers on your loan as well as all buyers of the property will need to sign a HAFA Affidavit. The closing can only take place after we receive the affidavit.

At the closing, you'll receive $3,000–$30,0001 to help with moving, rental and other relocation expenses. If you're not the primary resident of your property, you may request that the tenant receive $3,000 in HAFA relocation assistance. Any additional amount above $3,000 may be paid to you.

Please note: For tax purposes, relocation assistance paid at closing is considered income. Please consult a tax advisor for more information on how this could affect you.

Once the sale is finalized, your mortgage and any other loans against the house are settled from the proceeds of the sale. Under the HAFA program, you're fully relieved of any obligation to repay the mortgage. As with the sale of any house, unless otherwise negotiated, you'll need to move out by the closing date.

HAFA eligibility requirements may vary. Learn more.

1 The relocation assistance payment is calculated based on the appraised value of your property and the program rules. The total amount will be no less than $2,500, but no more than $30,000. The payment will be delivered after the closing if you comply with all terms and conditions of the program, which include but are not limited to the following: a valuation of the property must be completed and you must satisfy all subordinate liens and provide clear title for the property. If you are still responsible for a deficiency balance after the sale, you should be aware that this relocation assistance will increase that deficiency since it reduces the amount available to apply towards your mortgage debt. If you do not comply with all terms and conditions of the program, you will not receive the relocation assistance payment. The amount of any relocation assistance will be reported to the Internal Revenue Service (IRS) on the appropriate 1099 Form or Forms. We suggest that you contact the IRS or your tax preparer to determine if you have any tax liability. In order to receive the relocation assistance, the sale of the property must close by the closing date in the short sale agreement. Bank of America reserves the right to change or alter the relocation assistance at any time.