Considering a short sale but current on the mortgage payments? Will you still qualify?
The answer to that is maybe. It all depends on who backs your loan. Most loans are not actually owned by who you send your payment to - that bank is usually just a servicer and doesn't really make the rules about who does and does not qualify for a short sale. Most loans are backed by FHA, VA, Fannie Mae or Freddie Mac (conventional).
The only one of those that has a clear rule about being current or not is FHA. FHA requires that sellers are 61+ days in default (or 31+ for active service members) to be eligible for any workout option, including a short sale - NO EXCEPTIONS. So if you have an FHA loan, you're out of luck. You'll still have to miss those payments, but you can certainly still get started on your short sale while you wait.
None of the others have a stated policy about being in default to qualify, but you must be able to make a case for a future imminent default to be considered for a short sale, and even then, prepare for a tough road ahead.
Will you qualify for a short sale? Find out now!
The basic reason lenders approve short sales is because it will cost them less than going through the foreclosure process. Lenders don't approve short sales to help you, or to be fair. They have one simple goal - protect profits. In a short sale we must prove that it will cost the lender less to approve your short sale than any other option.
When lenders see that a homeowner is currently maintaining the payments, it makes a very difficult case for proving that the lender is in fact facing any threat of losses. This is why short sales with current payers are extremely difficult, and when possible, these sellers are likely targets for being required to contribute cash or take on promissory notes in order to be approved for their short sale.
Several years ago, I had a client who wanted to short sell his multi-family property because he was consistently losing money on it. He was current on the payments and had over $100,000 in his personal checking account. As lenders require full financial disclosure of non retirement assets, I advised that it would be very difficult to get his short sale approved while he was current, and that also the lender would likely require he contribute some of his large liquid assets. I warned that these consequences were highly likely, but he insisted on moving forward. We were in fact able to eventually get the approval after many painstaking months while he maintained the payments, but the lender also required a large cash contribution in order to approve the sale which we eventually negotiated down to $20,000.
While most of our clients are already in default, or close to it by the time they contact us, some are current and wish to stay that way. As long as the loan is not FHA, we will certainly try to get them approved while current as long as they are aware of the consequences. If they get declined, they can default and we can simply try again. Most folks don't care to invest 4-5 months to try to find out the answer, but a few do, and some are successful.
FREE SHORT SALE SURVIVAL GUIDE!
A STEP BY STEP MANUAL FOR GETTING THROUGH THE SHORT SALE PROCESS!
Minna was a God send! I was being told by everyone I couldn't short sell my home because I was current on my mortgage. My fiance found Minna's page and I contacted her the next day. She responded quickly and came out to view the home faster than expected. She told me she could get it sold and if all goes well it should be done by July. Well we closed on Friday May 18th. Jaime and Minna made this transaction work so smoothly and explained everything every step of the way. I can't thank her and Jaime enough! I will be recommending her to anyone that needs help with selling a home. Thank you Minna! You are the best!
JEROME
Last Updated on July 24, 2026 by Minna Reid
