Alabama Mortgage Relief Program: What Replaced the HAF and How to Save Your Home

What happened to the Alabama mortgage relief program?

Congress created the Homeowner Assistance Fund in the American Rescue Plan to help owners who fell behind during the pandemic. AHFA ran Alabama’s share as Mortgage Assistance Alabama. It paid past-due mortgage payments and related costs such as property taxes and homeowners insurance straight to the servicer or the county.

Demand was high. Industry reports from the time say the program received enough applications to commit about $100 million and then stopped taking new ones. AHFA later reported helping more than 6,000 families across all 67 counties. Those are AHFA’s figures from its own reports; we could not find a final, official total on AHFA’s current site.

The federal side is now closed too. The Treasury HAF page says the period of performance for every HAF award ended on September 30, 2026, and that recipients can no longer use HAF money to help homeowners. So there is no waiting list to join and no late application to file. Any website that still sells an “Alabama mortgage relief program application” is not connected to AHFA or Treasury.

Where Alabama homeowners get help now

With HAF gone, help comes from five places. None of them hands out a grant the way HAF did, but together they can often keep a family in the home or at least buy time to sell on your own terms.

AHFA today focuses on first-time buyer loans and down payment help, not on paying arrears. Still, the agency has launched short-term homeowner programs before, so it is worth one call to ask whether anything new exists for owners who are behind.

Servicer workout options, compared

Federal rule 12 CFR 1024.41 sets out how servicers must handle a request for help. If your full application arrives more than 37 days before a scheduled sale, the servicer has to review it for every option it offers and generally cannot hold the sale while the review is open. Here is what the main options look like in practice.

Ask the servicer to put every request and every denial in writing. If you are denied a modification, the letter must explain why, and you usually have a short window to appeal.

FHA, VA, USDA, and Fannie or Freddie loans

The type of loan you have decides which tools your servicer can use. Your monthly statement or closing papers will say which one applies.

• FHA loans: servicers follow HUD’s loss mitigation steps, which can include a partial claim. That moves the past-due amount into a second, interest-free lien that is repaid when you sell, refinance, or pay off the first loan. HUD tightened some FHA rules in 2025, including how often you can use these tools, so ask the servicer what you qualify for now.
• VA loans: the Department of Veterans Affairs has loan technicians who can contact your servicer for you. Call 877-827-3702 or see VA Home Loans. Our foreclosure help for veterans guide covers this in more depth.
• USDA loans: rural homeowners with USDA direct or guaranteed loans can ask about payment assistance, a moratorium, or a modification. Direct-loan borrowers deal with USDA Rural Development itself.
• Fannie Mae or Freddie Mac loans: many conventional loans are owned by one of these two. They offer payment deferral and a Flex Modification. Both have free online lookup tools that tell you if they own your loan.

Alabama foreclosure timeline, step by step

Most Alabama mortgages contain a “power of sale” clause. That lets the lender sell the home at public auction without filing a lawsuit. The process is short compared with many states, which is why the early weeks matter so much.

1. Missed payments (months 1 to 4): late fees start, and the servicer must try to reach you and tell you about help. It generally cannot make the first foreclosure notice or filing until you are more than 120 days behind.
2. Acceleration notice: most loan contracts require a letter saying the full balance is due unless the default is cured by a set date.
3. Redemption notice before the sale: for homestead loans covered by the 2016 rules, the lender must mail you a written notice about your right to redeem at least 30 days before the sale (§ 6-5-248(h)).
4. Newspaper notice: the sale notice runs once a week for three weeks in a newspaper in your county, listing the time, place, and terms (§ 35-10-13).
5. Auction: the sale is usually held at the county courthouse door. The lender often bids the debt.
6. After the sale: the buyer must give you a written demand for possession. Your right of redemption still runs, but it has strict conditions, covered next.

You can read these sections free on the Code of Alabama site. Alabama has no state foreclosure mediation program, so your counselor and your servicer’s review are the main ways to pause the clock.

The right to redeem after a sale

Alabama is one of the few states that lets a former owner buy the home back after a nonjudicial sale. For residential homestead property under a mortgage signed on or after January 1, 2016, the period is generally 180 days from the sale. For older mortgages it is generally one year.

To redeem you usually must pay the price paid at the sale plus interest and certain allowed costs, such as taxes and insurance the buyer paid. There is a trap here. Under Code of Alabama § 6-5-251, if the buyer sends a written demand for possession and you do not move out within 10 days, you can lose the right to redeem. Many families do not realize that staying put can cost them this right. A lawyer at Legal Services Alabama can tell you how these rules apply to your home before you decide whether to stay.

Free legal and counseling help in Alabama

A HUD-approved counselor is usually the best first call. Counselors check whether the servicer is following the rules, help you write a hardship letter, and keep copies of what you send. Use HUD’s housing counselor search or call 800-569-4287 and ask for an agency near Birmingham, Montgomery, Mobile, Huntsville, or your own county.

Legal Services Alabama serves low-income residents in all 67 counties. Call its central intake line at 866-456-4995, or 888-835-3505 for Spanish. Ask for help reviewing the acceleration letter, the redemption notice, and the newspaper notice, and say clearly if a sale date is set.

If you earn too much for legal aid, the Alabama State Bar runs a lawyer referral service with low-cost first meetings. A short consult can be worth it when a sale date is close or you are weighing redemption.

Ways to free up money for the payment

A servicer will only approve a workout you can afford. Cutting other costs can make the numbers work. Apply for SNAP through the Alabama Department of Human Resources and check the likely amount with our SNAP calculator. Ask your county’s community action agency about LIHEAP for heating and cooling bills. Owners who are 65 or older, or who are disabled, should ask the county revenue commissioner about extra homestead exemptions on property taxes. Our Alabama assistance programs guide lists more state help.

Papers your servicer will ask for

Servicers in Alabama use the same basic packet. Expect the servicer’s own loss mitigation form, a hardship letter, your two most recent pay stubs or benefit letters, recent bank statements, and your last federal tax return. If you claim a homestead exemption, keep your latest county property tax bill handy, since it helps a counselor check escrow numbers. Keep a copy of any letter that mentions your right to redeem. For a general list of what agencies accept as proof, see our document checklist.

A plan for the next two weeks

1. Day 1: call your servicer, ask for a loss mitigation application, and write down the name and date of everyone you speak to.
2. Days 1 to 3: call 800-569-4287 and book a HUD-approved counselor.
3. Days 3 to 10: gather the papers above and send a complete application by a method you can track.
4. Any day a sale notice arrives: call Legal Services Alabama right away and bring the notice.
5. By day 14: apply for SNAP, LIHEAP, or tax exemptions to lower your other bills.

Renters in the same family can read our Alabama rent relief program guide, and owners in other states can compare this with the homeowner stimulus relief program overview.

Related guides

• Foreclosure assistance for veterans
• Alabama hardship program
• Iowa mortgage relief program
• Government assistance for homeowners

Frequently asked questions

This guide is general information, not legal or financial advice. Talk to a HUD-approved counselor or a lawyer about your own loan. National Relief Program is an independent website, not a lender or government agency.