Seller relocation incentives in short sales have become more popular in the last few years. As a condition of any short sale approval, the lender will usually require the seller have no proceeds from the sale. However – there are a few instances where the seller can in fact be paid an incentive from a short sale. These are:
FHA short sales: In an FHA short sale, qualified owner occupant sellers are allowed an incentive of $3,000 with a successful closing. If there are unapproved closing costs, these funds may used and any payments to junior lien holders (if any) must first be paid through the use of this incentive, before it will be paid to the seller.
VA compromise sales: Short sales on VA backed loans now offer a $1,500 relocation benefit to some homeowners.
Private investor short sales: Although most private investor official short sale programs ended in 2016, most are still following their guidelines and offering some type of relocation assistance to owner occupants
Fannie Mae and Freddie Mac: Loans backed by FNMA and FHLMC also now have standard guidelines where qualifying owner occupant sellers receive a $3,000 incentive.
Traditional short sales. Some lenders in-house short sale programs will allow the seller some type of incentive. These are not exactly common, but they are allowed in some case, so it is always worth asking during the course of the short sale.
Overall, you should assume you will not receive any cash out of your short sale closing but if you do it will be a pleasant surprise.
There are qualifying guidelines to receiving any relocation incentives from your lender and those asked to contribute into their short sale will always be disqualified from receiving any incentives. A qualified short sale Realtor will be able to determine what relocation incentives if any – you may qualify for.
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Last Updated on July 3, 2018 by Minna Reid