7 Ways to Keep Your Home During Foreclosure (That Most People Don't Know About)

When most people hear "foreclosure," they assume the only option is to leave. But that's not always true. There are multiple programs and strategies designed specifically to help homeowners stay in their homes — and most people never hear about them.

1. Loan Modification

Your lender may agree to modify your loan terms — lowering your interest rate, extending the term, or adding missed payments to the end of the loan. Banks often prefer this over the expensive foreclosure process. Contact your servicer directly and ask about loss mitigation options.

2. Forbearance Agreement

A forbearance temporarily reduces or suspends your payments for a set period. This gives you breathing room to get back on your feet. After the forbearance period, you'll need to repay the missed amount — often through a repayment plan or loan modification.

3. Homeowner Assistance Fund (HAF)

The federal Homeowner Assistance Fund has distributed billions to help homeowners with mortgage payments, property taxes, insurance, and utilities. Each state administers its own program with different eligibility requirements. Many states still have funds available in 2026.

4. HUD-Approved Housing Counseling

Free, government-certified counselors can help you negotiate with your lender, understand your rights, and navigate assistance programs. Call HUD at (800) 569-4287 to find a counselor near you. This service is completely free.

5. Partial Claim / Advance Claim

For FHA, VA, or USDA loans, your loan servicer may be able to advance a partial claim — essentially a second, interest-free loan that covers your missed payments. You don't repay this until you sell, refinance, or pay off your first mortgage.

6. Sale-Leaseback (Sell & Stay)

This creative option lets you sell your home to an investor and immediately lease it back. You get cash from your equity while continuing to live in your home. Some programs even offer an option to buy back later when your finances improve.

7. Shared Equity / Home Equity Investment

If you have equity, companies offer lump-sum cash in exchange for a share of your home's future appreciation. No monthly payments, no interest. You stay in your home, use the cash to catch up, and settle the equity share when you eventually sell or refinance.