A Short Sale is one option HUD provides to resolve a reverse mortgage when the property’s value is less than the loan balance. In this situation, the home can be sold for less than the total amount owed, and the sale proceeds are used to satisfy the debt. Short Sale/Heir Payoffs are essentially the same thing (unless the value of the property exceeds the balance owed), so you would follow the same instructions outlined below.

Many families find that the home has fallen behind on upkeep — especially when a parent has moved into assisted living or passed away. This is very common and understood by HUD and appraisers.
Deferred maintenance and overgrown yards are not uncommon in these circumstances and reflected in the valuation. The key is to act quickly — the longer the process takes, the greater the risk that HUD will move the property into an Asset Sale or Foreclosure. Prompt communication and documentation help keep the file eligible for a Short Sale or Heir Payoff option.

To begin the Short Sale process, I’ll help you submit a Letter of Intent to HUD. This letter must come from an authorized party (such as an heir, executor, or homeowner) and simply states that you intend to sell the property. If the home’s estimated value is lower than the reverse mortgage balance, the letter should also include a request for an appraisal.

HUD can order the appraisal and charge the cost to the HECM loan. If you prefer to obtain your own appraisal instead, you can do so by hiring an FHA-approved appraiser.
I can assist with this, or you can also find one in your area using HUD’s approved appraiser search tool:
🔗 https://entp.hud.gov/idapp/html/appraisal_look.cfm

In addition to the Letter of Intent, HUD requires proof the property is being actively marketed. This can include:
1️⃣ A copy of the MLS listing,
2️⃣ A realtor contract, or
3️⃣ A photo of a “For Sale” sign in the yard.

Please note: If the Estate has someone in mind who wants to buy it, the property does not have to be actively listed on MLS. You would confirm short sale eligibility by using the FHA appraisal at 95%. If the loan is eligible for a short sale, there are additional costs that HUD may pay associated with the closing costs.

HUD asks for monthly updates showing continued marketing activity. You’ll have six months from the “Due & Payable” event (such as the homeowner’s passing or move-out) to complete the sale.

If more time is needed, HUD may grant up to two 90-day extensions. To request an extension, you’ll need to send a written request with proof the property is still for sale. Once approved, HUD will confirm by email via answers@hud.gov.

I will submit all necessary documents to obtain a short sale to answers@hud.gov and work directly with appraisers, title companies, Probate Attorneys, and buyers on your behalf.

✅ Tip: The faster communication and document submissions happen, the greater your chance of keeping the property eligible for a Short Sale — avoiding Asset Sale or Foreclosure.