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Can I Sell My House Through an Affordable Home Mortgage Program?

by Don Rafner, studioD

If you're in danger of falling behind on your mortgage payments and you want to avoid foreclosure, you have an option: You can try to sell your home through the Home Affordable Foreclosure Alternatives Program, one of the programs under the umbrella of the federal government's Making Home Affordable series of relief efforts. But selling your home through this program isn't always easy, and you'll have to meet certain requirements to participate.

Home Affordable Foreclosure Alternatives

The government's Home Affordable Foreclosure Alternatives Program provides financial incentives to mortgage lenders who allow struggling homeowners to sell their homes through either a short sale or to surrender the title to their residences through a deed-in-lieu of foreclosure. In a short sale, a lender allows homeowners to sell their residence for less than what they owe on their mortgage loans. It's a way for homeowners to list their homes at a lower price and sell them before they default on their mortgage payments and fall into foreclosure. In a deed-in-lieu of foreclosure, homeowners simply give the title to a home back to their lenders, transferring ownership to these lenders. Lenders might choose these options as a way to avoid the expense and time of taking a home over through foreclosure and trying to sell it, especially in a challenging housing market.


In addition to helping homeowners avoid foreclosure, the program comes with other benefits. In a short sale conducted through the Home Affordable Foreclosure Alternatives Program, homeowners do not have to repay any remaining mortgage debt after they sell their residences. If homeowners sell a residence for $200,000 even though they owe $220,000 on their mortgage loan, their lender agrees to write off that $20,000 in mortgage debt. Homeowners participating in this program might also receive $3,000 to help cover the expenses of relocating to a new home. Housing counselors approved by the U.S. Department of Housing and Urban Development also provide free advice to homeowners participating in the program.

Financial Hardship

To participate in this program, you must meet certain requirements. First, you'll have to prove that you're suffering a financial hardship that makes it impossible for you to afford your mortgage payments. You can prove this by providing copies of your most recent bank account statements, tax returns, paycheck stubs, medical bills or credit-card bills.

Other Requirements

You'll also have to meet other requirements. For example, you must not have purchased a new house within the past 12 months, and you must owe no more than $729,750 on your first mortgage loan. You must have taken out your mortgage loan on or before January 1 of 2009, and you must not have been convicted of several crimes during the last 10 years. To participate in this program, you'll have to contact the company to which you already send your monthly mortgage payments. Not all lenders participate in the government's Making Home Affordable programs.

About the Author

Don Rafner has been writing professionally since 1992, with work published in "The Washington Post," "Chicago Tribune," "Phoenix Magazine" and several trade magazines. He is also the managing editor of "Midwest Real Estate News." He specializes in writing about mortgage lending, personal finance, business and real-estate topics. He holds a Bachelor of Arts in journalism from the University of Illinois.