What is HAFA?

The Home Affordable Foreclosure Alternatives (HAFA) Program is a government-sponsored initiative overseen by the US Treasury Department and administered by Fannie Mae assisting all Home Affordable Modification Program (HAMP)-eligible homeowners in avoiding foreclosure, specifically through short sales or deeds-in-lieu of foreclosure.1 HAFA was announced on November 30, 2009 in a HAMP Update titled Introducing the Home Affordable Foreclosure Alternatives Program.2

HAFA directs lenders to assist eligible homeowners in quickly and effectively implementing short sales or deeds-in-lieu by providing financial incentives to lenders that carry out foreclosure alternatives through the program's guidelines set forth in Supplemental Directive 09-09 Revised (revised March 26, 2010).3 The program was introduced in part with the intent to remove the stigma from short sales and help keep communities from being destroyed through massive foreclosures.

On June 1, 2010 Fannie Mae and Freddie Mac announced full support of HAFA for loans owned or guaranteed through them. The program will begin August 1, 2010 and shares the HAFA Program's projected expiration date of December 31, 2012.4, 5 This announcement changed the existing condition preventing loans owned or guaranteed through the two government-serviced enterprises from being assisted through HAFA.