Short Sale Incentives offered by Banks and Lenders

Incentive Programs for Short Sales are now being offered by individual banks and lending institutions. While the information is limited and not widely publicized, we have connections with these institutions that can help facilitate an incentive for our clients with a successful short sale transaction.

FHA Short Sale Incentive Program

FHA offers sellers a $1000 incentive to complete a short sale through the Pre-Foreclosure Sale Program (PFS) which has actually been around since 1994.  HUD/FHA will pay the seller an incentive to successfully short sale their home within 120 days of approval to the PFS program, as long as the seller meets the FHA short sale incentive program guidelines.  This can be free money for the seller as long as there is no second mortgage or junior lien, otherwise HUD will use the incentive money for secondary liens.

Here is a look at a few incentive programs offered by individual banks:


$3,000-$5,000 short sale incentives offered, even on non HAFA and non owner-occupied properties.

Wells Fargo

Wells Fargo says it has been making “enhanced financial relocation assistance offers” (or short sale incentives) that can be as much as $10,000 or $20,000 to certain borrowers who choose to go through with a short sale or transfer the title back to Wells Fargo via a deed-in-lieu. The downside is that these larger incentives are mainly offered in Florida and other east coast states where the foreclosure process is lengthy and difficult.


JPMorgan Chase has adopted a range of incentives to borrowers that agree to a pre-foreclosure sale “because if we can’t work out a modification, a short sale is a better result for the borrower, the servicer, the investor, and the neighborhood than a foreclosure,” the company said in a statement. Chase says the amount of the offer “depends on a number of factors” but declined to share specific details on how much money it’s been providing to short sellers.  In terms of the exact dollar amounts, their short sale incentives range between $5,000 and $30,000…plus a borrower can earn an additional $3,000 in addition, if a successful HAFA short sale is completed.

Citi, CitiGroup, CitiBank

Citi has confirmed that its average incentive offer is currently $12,000 for borrowers in cases where Citi owns the loan. “Incentives are offered to customers experiencing financial hardship who need funds to proceed with the short sale,” a spokesman for the lender explained. The amount, which is agreed upon upfront, varies according to the borrower’s individual circumstances and loan characteristics, Citi said. It is disbursed to the homeowner when the short sale is completed. Like many programs such as this, typically the incentive offer is extended to the homeowner during the foreclosure process in an effort to entice a short sale transaction.

Bank of America’s Cooperative Short Sale Program

Bank of America’s Cooperative Short Sale Program is a new program that began in January 2011 to help provide the quickest route to a short sale decision so that homeowners may explore all their options and avoid foreclosure. With this program, Bank of America typically uses a local listing agent to reach out to the homeowner, and extend them the offer of a “pre-approved” short sale (price is already determined), which keeps them from having to wait up to 60 days for a representative to even be assigned to the short sale. There is a $2500 incentive at closing for the seller, and no deficiency is pursued by the bank. Also it does not have to be owner occupied (investment properties qualify as well). The short sale negotiator that I work with just did one of these for a borrower with 4 investment homes, $10K in incentives and no deficiency!  The seller cannot have secondary loans or mortgage insurance to be eligible. The best part is that the bank will respond to an offer within 10 days, and eliminates the “surprises” that come up with a typical short sale. This program is in test markets and not fully adopted into their system.