- Streamlines the timeframe
- Relieves a seller from liability
- Provides relocation assistance, up to $3,000
If your loan is held by Freddie Mac and you are eligible for a HAFA short sale, then you need to follow very specific guidelines for the program. It's even more convoluted than a Fannie Mae HAFA short sale. Which is probably why so many agents are confused and sellers are hesitant to try.
Basics of a Freddie Mac HAFA Short Sale
The surprising part is you don't need a real estate agent to find out if you're eligible for a Freddie Mac short sale. In fact, if you have already accepted a short sale offer, it's possible you will be disqualified from the program. An ARASS is excluded from Freddie Mac HAFAs.
- Look up your loan to determine that is held by Freddie Mac. Use the Freddie Mac Loan Lookup Tool.
- Contact your bank and ask for Freddie Mac HAFA short sale paperwork.
- Complete the paperwork and return it within 14 days. If you do not return the paperwork within 14 days, your file will be closed, possibly permanently.
- Upon receipt, the bank has 30 days to approve your eligibility for Freddie Mac HAFA.
- The bank will set a minimum "as is" price for 90 days, and allow 120 days for marketing.
- When you receive an offer, you have 3 days to submit an RASS (request for approval of short sale).
Are You Eligible for a Freddie Mac HAFA Short Sale?
Not every seller with an underwater home whose loan is held by Freddie Mac will be eligible for a HAFA short sale. If you're not eligible, you are free to pursue the traditional short sale. Freddie Mac has very specific guidelines, and here are a few:
- The home must be occupied and your principal residence
- You must be more than 60 days delinquent.
- Your cash reserves in the bank cannot exceed 3 times your PITI or $5,000, whichever is greater.
- Your mortgage payment must be greater than 31% of your gross monthly income, but you won't be disqualified for this reason alone. You need 2 reasons to be ineligible. See, I told you, it's tricky.
Freddie Mac HAFA Short Sale Tips
For starters, find yourself a HAFA specialist. This person will probably be a short sale agent, but make sure the agent is certified to do HAFA short sales. Ask about HAFA certification. Ask how many HAFA short sales this agent has closed and whether any were Freddie Mac. Here are more valuable tips:
- Retirement accounts are not considered as cash assets or a disqualifying factor.These include a 401K, 403b, 457, IRA or pension.
- Freddie Mac will pay a 3rd party vendor for negotiation, separate from the real estate commission.
- The bank may offer a deed-in-lieu of foreclosure, if it is authorized by Freddie Mac.
- Maximum seller concession for buyer's closing costs is 3% of the sales price.
- Closing is within 45 days from approval, no more than 60 days.
