How To Write A Hardship Letter

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How to write a Short Sale Hardship Letter

Despite the recent improvement of our housing market on a national level, a high percentage of home owners still find themselves in a negative equity position where they owe more than the value of their home.  If you are in a difficult financial situation like much of the country,  a short sale may be the only alternative to a foreclosure.  We do have a saying we use in the business, “a short sale is only for those that HAVE to sell, not for those that WANT to sell”.  In a short sale, your lender will require you to prove your financial hardship, and the short sale hardship letter is a critical piece of required documentation.


What constitutes a “financial hardship”?

  • Loss of employment or reduction in income
  • Death in family or major unexpected medical expenses
  • Relocation or Job Transfer
  • Increased bills or expenses
  • Major repairs needed to property, without resources to pay for them
  • Divorce

By the time a home owner is considering a short sale, most have already done a “band aid” loan modification, either a forbearance or repayment plan, which is a temporary solution to a long term problem.  If you have already written a hardship letter for a loan modification, you will need to write a new one that is more specific to a short sale.

Here are some common things that a short sale hardship letter should and should not contain:

  1. The hardship letter should be signed and dated
  2. Reference the property address and loan number in the header
  3. It should be short and to the point, 5-10 sentences in enough
  4. State your hardship, and the circumstances that led you no longer being able to afford the property
  5. Make a strong case and relay the desperation of your case
  6. Do not blame your lender for your circumstances
  7. Do not write to much, they don’t have the time to read it
  8. End the letter with something like “a short sale seems to be our only solution to avoid foreclosure” or “please consider a short sale on our property, we can find no other answer to our circumstances”
  9. Again, don’t forget to sign and date it!

CLICK HERE to see some sample short sale hardship letters

While you may be stressed from the financial situation in your life, know that this is only a temporary season in your life.  All things come to pass.  While the short sale process is anything but “short”, you can recover your credit and be ready to purchase a home again in as little as 18 months.

In a short sale, it is important to have an experienced agent to guide you through the short sale process.  ALL traditional closing costs are paid for by your lender in a short sale, including your real estate brokerage fees.  To find a local short sale Expert who will help you with the process at no cost to you, visit  That site is also a top resource for anything related to short sales including other required documents, and lender specific guidelines and contact information.