Fairfax Short Sales: How an FHA Short Sale Works

If you have an FHA loan, you can short sale your Fairfax VA home.  Not only will FHA forgive you of your debt, but it also won’t ask for a promissory note. Here is how an FHA short sale works:

  • As with any Fairfax short sale, the first thing you need to do is send in all of the standard paperwork. Include copies of your last 2 bank statements, last 2 years tax returns, and last 2 pay stubs. You should also include a hardship letter as well as a financial worksheet.
  • After the short sale lender has reviewed those documents, they will order an FHA appraisal. This kind of appraisal must be done by an FHA appraiser.
  • Once the appraisal comes back and the lender has reviewed your documentation, they will issue an “approval to participate.” At that point, they are allowed to approve any offer that nets 88% of the appraised value. After 30 days, however, they are only allowed to accept 86% of the appraised value.
  • After 60 days have passed, they can accept 84% of the appraised value. This is what makes FHA short sales so much easier than regular short sales: You can start the process before you get an offer from a buyer.

Once you get an offer from the buyer, then the lender has 5 working days to approve or deny the short sale offer. To get a copy of the exact rules for FHA short sales, Google, “Mortgagee Letter 2008-43.” 

Thinking about a short sale? I can help you short sale your property and never pay the bank another penny.

Thanks for reading this,

Thierry Roche

Thierry is a Real Estate Agent at RE/MAX Premier, and Host of Talk Radio’s, ‘Inside Real Estate’

Phone: (703) 322-0600.


Thierry is an advocate for Homeowners in Distress. Thierry has made it his personal mission to help as many people as possible avoid foreclosure and keep their home.

Thierry Roche specializes in loan modifications and short sales in Fairfax Virginia. Fairfax Loan Modification Help. Fairfax Short Sales. Fairfax Short Sale Realtor. Fairfax County Short Sale Realtor. Fairfax VA Short Sales. Fairfax Realtor.

Copyright 2011 Inside Real Estate, LLC. All Rights Reserved.

This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing. The views expressed here are Roche’s personal views and do not reflect the views of RE/MAX Premier. This information is provided as a courtesy to our viewers to help them make informed decisions.

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