The Home Affordable Foreclosure Alternatives (HAFA) program was created to help homeowners avoid foreclosure through structured alternatives like a short sale or deed in lieu of foreclosure. Launched in 2010 as part of the government’s broader Making Home Affordable initiative, HAFA provided important tools for people facing hardship and struggling with missed mortgage payments.
Even though HAFA officially ended in 2016, the ideas behind it still apply today. Many homeowners continue to face similar challenges and can benefit from knowing what HAFA offered and what options for foreclosure prevention are available now.
A hardship is any situation that makes it hard to pay your monthly mortgage payment. This could include a job loss, divorce, illness, or unexpected expenses. During the HAFA era, proving a genuine hardship was one of the key steps in qualifying for help.
If you’re experiencing something similar today, you may qualify for other alternatives to foreclosure. Early action is key.
HAFA was designed to help people prevent foreclosure by offering them better options. The full foreclosure process is damaging—it can lower your credit score, lead to a deficiency judgment, and result in the loss of your home. HAFA offered two key options: the short sale and the deed in lieu of foreclosure.
Both options were meant to help you transition out of your home with less harm to your finances and future.
With a short sale, you sell your home for less than what you owe on the mortgage. The lender agrees to accept the sale price as payment in full. Under HAFA, homeowners could qualify for this option even with a low credit score or significant loan balance.
Importantly, HAFA short sales came with a guarantee: the lender could not pursue the homeowner for the remaining loan balance after the sale.
The second HAFA solution was the deed in lieu. This option allowed home owners to sign over ownership of the property directly to the lender to stop foreclosure. In return, lenders promised not to take legal action for any remaining debt.
Home owners could also receive financial support—up to $10,000 in relocation assistance—if they completed the process successfully. This payment helped cover moving costs and basic needs after vacating the property.
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HAFA helped home owners in several ways:
These benefits reduced stress and gave home owners a path to financial recovery.
A mortgage servicer is the company that handles your mortgage payments. They collect your monthly payments, manage escrow, and work with you if there are problems. In HAFA, the servicer had to follow strict timelines and communicate regularly.
Today, working with your servicer is still essential. If you’re at risk of falling behind, reach out to them early to ask about loss mitigation options, repayment plans, or a loan modification.
One of the key goals of HAFA was to get lenders to cooperate with home owners. The program simplified the approval process and offered incentives to lenders and servicers who helped borrowers prevent foreclosure.
Lender agreement was required in writing. If the lender accepted a workout option, they also had to agree to waive the deficiency balance. That protection is still worth asking about in current programs, even though HAFA is no longer active.
After completing a deed in lieu, the home owner no longer owns the property. In return, they are released from the mortgage debt. HAFA made this process easier by offering a predictable path, a clear timeline, and financial assistance.
While today’s alternatives may not offer identical benefits, some lenders still offer relocation aid and debt forgiveness in similar situations.
While the HAFA program ended in 2016, it remains an important part of foreclosure history. It taught mortgage lenders, servicers, and housing counselors how to better support home owners in crisis. Many of today’s rules and protections are based on what HAFA introduced.
Learn more about Avoiding Foreclosure from HUD
HAFA may be gone, but foreclosure prevention is still a priority. Homeowners can now explore:
A good first step is contacting your mortgage servicer and asking about current options. There are many alternatives to foreclosure for those who act quickly.
Learn about your options from the Consumer Financial Protection Bureau
If you’re behind on payments but want to stay in your home, loan modification may be the best path. It can lower your interest rate or extend your loan term, reducing monthly payments. FHA borrowers may qualify for an FHA Partial Claim.
In some cases, you may be able to refinance your loan into a more affordable option. However, missed payments, a low credit report score, or a high loan balance can limit your eligibility.
Knowing your options is the first step. However you’re trying to stop foreclosure, professional help is available.
One of the best ways to find alternatives to foreclosure is to talk to a HUD-certified housing counselor. These experts can help you understand your rights, explore alternatives, and prepare paperwork for your lender. They’ll also explain complex topics like deed in lieu, mortgage loan terms, and foreclosure timelines.
If you are concerned about your mortgage, contact us today for free, confidential counseling. We'll look at your unique situation, answer your questions, and help you come up with the best recovery plan for you.
