VA Short Sale

A Veteran Adminstration Short Sale is commonly referred to as a VA short sale. When a borrower purchases a property with a VA loan and they have to complete a short sale it will go through a VA short sale review which is a specific short sale program in relation to VA loans. Different loan types are reviewed for different programs with varying eligibility guidelines. A VA short sale is a government program so it has strict guidelines for participation.

During a VA short sale an appraisal will be completed. The guidelines will state that the proceeds of the sale should NET 88% of the appraised value with wiggle room down to 85.05%. If the value comes back too high it can be disputed through the local Construction and Valuation group. You must provide comps that justify your action and a review can be completed. It is also possible to have a variance reviewed by VA to accept lower proceeds from the sale.

Another important guideline is that contributions are allowed from parties on VA Short Sales to additional lien holders if the NET is being met. Also, there may be a small relocation incentive of $1,500 for veterans completing a short sale if NET is being met as well. It’s important to have an idea of the guidelines in order to have adequate expectations for all parties and to create a stratedgy for the best chances at completing the short sale successfully. At the end of the day for government short sales it all comes down to the proceeds of the sale.

If you have any questions about a VA short sale or would like assistance, please fill out the form below and someone will contact you shortly.

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