How Relocation Incentives Work in a Short Sale

If you’re facing a short sale, chances are money is already tight. Between missed mortgage payments, mounting bills, and the stress of moving, most homeowners feel completely tapped out. That’s why one of the most overlooked benefits of doing a short sale is the possibility of getting relocation assistance—cash in your pocket at closing to help you move on.

Sounds too good to be true? Let’s break it down.

What Is Relocation Assistance in a Short Sale?

Relocation assistance (sometimes called “cash for relocation” or “relocation incentive”) is money a bank offers the homeowner at closing of a short sale. Unlike myths about foreclosure “cash-for-keys” programs, this money isn’t about walking away quietly. It’s about helping you land on your feet after selling your home for less than you owe.

Instead of leaving you high and dry, lenders recognize that if you succeed in closing a short sale, they avoid the long, expensive foreclosure process. To encourage you to complete the sale, they’re often willing to sweeten the deal with a financial incentive.

How Much Can You Get?

The amount varies, but here’s a typical range:

- Government-backed loans (FHA, VA, USDA): relocation incentives usually fall between $1,000–$3,000.

- Fannie Mae & Freddie Mac loans: Up to $3,000 for approved short sales.

- Private lenders or investor-owned loans: sometimes $5,000–$10,000 or more depending on the situation.

Keep in mind—these incentives are only available if the short sale closes successfully. If the deal falls apart, the offer disappears.

Who Pays for It?

This isn’t money that comes from your buyer or your agent. It’s paid directly by the lender at closing. The bank essentially allocates a small piece of its loss to help you transition out of the property.

Do You Qualify?

Not every short sale automatically comes with relocation assistance, but here are the common requirements:

- You must be living in the property as your primary residence.

- The short sale must be approved and completed.

- You must not have caused “avoidable delays” in the process.

- The lender or investor must participate in the program (not all do).

If your home is vacant or you’ve already moved out, some lenders may reduce or deny relocation funds—but others still approve them. It’s case-by-case, and this is where having an experienced short sale negotiator makes all the difference.

Why Lenders Offer Relocation Incentives

Banks aren’t handing out money out of generosity. The math is simple:

- Foreclosure costs them tens of thousands in legal fees, repairs, and time.

- Short sales close faster and return more money to the lender.

- A small cash payment to you ensures you cooperate, move on, and complete the deal.

For them, it’s an investment in efficiency. For you, it’s much-needed breathing room.

How to Maximize Your Chances of Getting Paid

1. Ask upfront. Don’t assume your lender will offer it automatically. Put the request in writing.

2. Stay cooperative. Respond to document requests quickly and keep communication open.

3. Work with a pro. An experienced short sale negotiator knows which lenders offer relocation assistance and how to position your file to qualify.

4. Close cleanly. If the deal drags or collapses, the incentive disappears.

Bottom Line

Relocation assistance in a short sale is real—and it can make a huge difference during a tough transition. While it won’t erase all the stress of selling your home for less than you owe, it can help you cover moving trucks, security deposits, or even just give you a financial reset.

For more information about how we assist homeowners and the types of sellers we serve, read our How We Help and Who We Serve pages.