Short Sale Cash Back Seller Incentives


How can I get paid for doing a short sale on my home?

Short Sale Cash Incentives


We are asked this question all of the time and it's true... You too can get paid to short sale your home!

When you complete a short sale on your home, you will not receive any proceeds from the actual sale of your home. In a short sale, all of the proceeds are used to settle your mortgage, and any other liens you might have against the property. (The remainder of the balance owed to the lien holders is forgiven) The good news is that there are still ways that you can walk away with money at the end.  There are many incentive programs, run by the government and by the lenders, that pay cash to you at the close of escrow.  We have received payouts of $20,000 - $30,000 for our clients upon the successful completion of their short sale.

Why would a lender pay you to short sale your home when they are already taking a loss? 

It all comes down to the numbers. In most cases, it is going to be less expensive for a lender to allow you to short sale your home than it is for them to spend the time and money on foreclosing. By offering the cash incentives at the end of a short sale, it helps increase the number of short sales completed and in turn, saves them money.

There are various short sale incentive programs that are available to you.  (Please note that rules and regulations change frequently. This info is a guide, and you can contact us at any time for a confidential review of your situation to determine if you may qualify for a cash incentive.)

Government Short Sale Incentive Programs

The government has set up various short sale incentive programs in an attempt to stem the wave of foreclosures by making short sales more attractive to both lenders and underwater homeowners.  These incentives are designed to simplify the short sale process in addition to motivating both parties involved. Most of the government programs pay an incentive to the lender to offset their losses and to the homeowner as a cash incentive at the closing. 

FHA Short Sale Incentive Programs

The Federal Housing Administration (FHA) is part of the Department of Housing and Urban Development (HUD). The FHA Pre-foreclosure Sale Program is for mortgages that are insured through FHA.

FHA was originally offering up to $1,000 to homeowners upon completion of their short sales.  In 2013 they updated their process and raised the amount to $3,000. A stipulation is the seller must be the owner-occupant of the home. 

HAFA Short Sale Incentive Programs

The Home Affordable Foreclosure Alternative program (HAFA) was introduced by the federal government in April 2010, in an attempt to slow the growing wave of foreclosures by making the short sale process more streamlined and standardized. It also made short sales more attractive to both homeowners and lenders by offering cash incentives to both.

The HAFA program was amended several times and many lenders ran their own versions of it. (If your loan was owned by Freddie Mac or Fannie Mae, the short sale was required to be processed through their in-house programs and not through HAFA.) The HAFA program ran through to 2016 and it has not yet been announced if it will come back. It is expected to be reintroduced when the short sale market increases again.

HAFA paid a cash incentive of $3,000 to the homeowner upon the successful closing of a short sale. The relocation incentive did require that the home was owner-occupied and it was not available on investment properties. 

Freddie Mac and Fannie Mae Short Sale Incentive Programs

The Federal Housing and Finance Agency (FHFA) announced new guidelines, which took effect as of November 2012. Their new “standard short sale” program is similar to HAFA and replaced their involvement in HAFA. It applies to mortgage loans where the investors are Freddie Mac and Fannie Mae.

Through this incentive program, Freddie Mac and Fannie Mae will offer the seller up to $3,000 in relocation costs upon the successful closing of the short sale. (In this program, the relocation incentive is total. If you receive an incentive from another source, Freddie or Fannie will only offer the $1,000 difference to make up the $3,000.)

Lender Short Sale Incentive Programs

short sale cash incentive programsMany of the larger lenders have their own short sale incentive programs in place, and they are typically the most bountiful. We have received cash incentives as higher as $30,000 for our clients at the completion of their short sale. (Please note, results vary with every situation and there is never any guarantee.) Information on these programs is not easy to find and will vary by lender and by who the back end investor is.


Bank of America Short Sale Cooperative Program

This program began as a test program in Florida in early 2012, and it is now available to select borrowers in other states as well. Incentives to homeowners reportedly range from $2,500 to $30,000. 

Wells Fargo Short Sale Incentive Programs

Wells Fargo offers cash incentives ranging from less than $3,000 to over $20,000 to homeowners for closing a short sale. 

Chase Short Sale Incentive Programs

Chase offers cash incentives of up to $35,000 to homeowners for completing a short sale. 

Don't See Your Lender Listed?

Don't worry.  These are only a few small examples.  Contact us today to learn about your options and find out if you may qualify.

What if you receive more than one short sale incentive? 

In many instances, you can receive more than one cash incentive. For example, if you received a short sale incentive through your lender and also processed the short sale through HAFA, you would have been able to receive both cash incentives. 

In Closing:

Even though you will not receive any proceeds directly from the short sale, there are many ways that we may be able to obtain a cash incentive for you at the completion of the short sale in addition to having the remaining balance forgiven.  As mentioned above, the programs frequently change, along with the lenders' guidelines.  Contact us today to find out if you may qualify.  There is never any cost or obligation to meet with our short sale team. 

Also, always make sure to discuss a short sale with your tax preparer or CPA. (We have an excellent person we can refer you to if needed.)  Similar to how you pay taxes on income, you may pay income tax on any cash incentive payments or relocation expenses that you receive upon the completion of your short sale.




San Diego Short Sale Experts
Ph: 619-777-6716
2820 Camino del Rio South #316
San Diego, CA 92108 US
BRE License # 01384181 & CA BRE Broker License # 01885775.