Losing your home whether through foreclosure or short sale can be a very stressful time.  The good news is that most mortgage companies are recognizing that.  By participating and closing a sucessful short sale you may be eligible for relocation assistance up to $3000 from your mortgage company.  Of course there are certain guidelines that have to be met and the transaction must result in a closed sale.


HUD Preforeclosure Sales Program


  • Outright sale of mortgaged property to a third party and must be an “arms length” transaction.
  • Outstanding indebtedness includes; unpaid principal balance + delinquent interest +Partial Claim (if applicable).
  • HUD will pay up to $1,000 incentive to the Mortgagor if closed within 3 months from thedate of application; thereafter, the incentive is reduced to $750.
  • HUD will pay an additional amount up to $1,500 for the discharge of junior liens afterthe Mortgagor’s incentive has been applied.
  • The property must be owner-occupied, no “walk-a ways” or investment properties.
  • Exceptions: when it is verifiable that the need to vacate was related to the cause of default(job loss, transfer, divorce, death), and the subject property was not purchased as rentalinvestment, or used as a rental for more than 18months.
  • The Mortgagor must be 31 days or more delinquent at the time of the Preforeclosure Sale closing.
  • The Mortgagor must provide documentation substantiating a reduction in income or anincrease in living expense, and documentation that verifies the Mortgagors need to vacatethe property (if applicable).


HAFA (Home Affordable Foreclosure Alternatives) Program


  • The property is the borrower’s principal residence.
  • The first mortgage originated before January 1, 2009.
  • The mortgage is delinquent or default is reasonably foreseeable.
  • The mortgage’s unpaid principal balance is no more than $729,750 (higher limits for 2 to 4 unit dwellings).
  • The borrower’s total monthly mortgage payment exceeds 31% of their gross income.
  • The mortgage also needs to be serviced by a lender who is participating in the HAMP program (the majority of lenders are).
  • Borrowers receive $3,000 for relocation assistance.
  • Lenders must allow the opportunity for the borrower to attempt a Short Sale or accept a Deed-in-Lieu of foreclosure before following through with a foreclosure.
  • Borrowers are fully released from future liability for the first mortgage debt – lenders cannot ask for a cash contribution, promissory note, or deficiency judgment to complete a short sale or DIL. Additionally, junior lien holders (i.e. 2nd mortgages) who participate in the HAFA incentives must also release borrowers from future liability.
  • Full program details available at 

Above are two of the government programs that are available.  Your mortgage company may have other preforeclosure programs available that offer relocation assistance. 


Whether or not you may qualify for relocation assistance, a short sale is far better than a foreclosure anyday.  Contact me at 205-873-0175 or for more questions or to get your short sale started today.




Your Short Sale Expert