If you're eligible, you may be able to start the short sale process right away. However, in most cases, FHA requires that we evaluate whether you are eligible for a loan modification or other home retention options first. So your Customer Relationship Manager will probably ask you for updated financial information and additional documents.

If we authorize you to start the short sale process, we'll arrange an appraisal of your house (at no cost to you) to determine its current fair market value. You'll receive the FHA "Approval to Participate" letter, with the minimum sale price for the property. You then must sign and return this letter to us within 10 calendar days. The property must be listed for sale with a licensed real estate broker/agent unrelated to you within seven calendar days of your receipt of the letter.

We recommend working with a real estate agent experienced in short sales who understands the process.

If you have a Bank of America home equity loan or home equity line of credit, we'll take care of getting approvals for the short sale. If the loan or line of credit is with another lender, you must contact that servicer and request a Second-Lien Release.

Typically, you'll have 120 calendar days to market the house and get an offer. You're required to maintain the property in ready-to-show condition at all times. Your agent must submit all required documents on time. You can't sell the house to a family member or anyone else you have a personal connection with (also known as an arm's-length market transaction). If your house is unable to be shown or sold because of an unexpected circumstance, such as damage from a tornado or flood, please call us immediately.

Once you receive an offer, your real estate agent will submit a copy of the executed sales contract and all additional documents. To make sure a short sale is completed successfully, your agent must submit any requested documents on time and respond quickly to any counteroffers.

If the offer is accepted, we'll send you an approval letter releasing the house for purchase. With everything in order, final documents will be prepared for closing. You'll receive a letter outlining the details of the sale and a set of documents that must be signed, notarized and returned to us before the short sale can be completed. As with the sale of any house, unless otherwise approved by us, you will need to move out on or before the closing date.

At the closing, you could receive up to $3,000¹ to help with moving, rental and other relocation expenses. For tax purposes, relocation assistance paid at closing is considered income. Please consult a tax advisor for more information on how this could affect you.

Once the sale is finalized, a mortgage and any other loans against the house are settled from the proceeds of the sale.

If we forgive any amount of mortgage debt, there may be possible tax consequences. Please consult a tax advisor for more information about how this could affect you.

We'll report the sale to the major credit reporting agencies as completed for less than the amount owed.