If you are seeking a HAFA loan, this means you DO NOT want to sell your home you want to stay in your home. Now, if you DO want to sell your home and the HAFA issue is soley to avoid unearned income obligations with the IRS It is important for those of us reading your question to udnerstand what your 'end' game is, keep the house or sell the house and avoid the IRS bill.
If you DO NOT want to sell your home, there is no need for a real estate professional.
You will discover the HAFA loan is provided by your existing lender. You must inititate this activity.
What you will discover is, if the HAFA LOAN or the banks alternative, does not include principle reduction, it rarely is a better deal for the homeonwer. This is why the majority of HAFAs eventually lead to a short sale.
As Danielle stated, you need to be having this conversation with those you hired to represent you.
Short sales are the most complex, illogical, convoltuted, opaque and unpredictable real estate procedsses ever imposed on the industry. Second guessing your agent and soliciting opinions from statngers who do not have access to the facts is a really bed decion.
You can apply for HAFA before or after an offer. And if you want to see the documents visit the HAFA site: http://www.makinghomeaffordable.gov/programs/exit-gracefully
The type of short sale program is not part of the listing or purchase contract. It is an agreement with your lender which may or may not be approved. Just because you "want" the HAFA program does not mean the lender will approve it. You have to apply.
I wish you the best with your transaction. As far as HAFA, that is something that the Lender will see if you are eligible for. When I contact a Seller's lender that is the first process you go through. You will complete an RMA, which is a request for modification, even if you do not want one. It is a standard form.
Hope all work out for you!
Todd Kevitch, Broker
BPO Realty LLC