Borrowers with a Fannie Mae-backed loan may qualify for cash relocation assistance if they're facing or in foreclosure but they elect to use one of the alternatives, such as short sale, instead. The cash incentive amount varies by year, but was $3,000 for 2013. The money is meant to help borrowers move and find a new place to live, but Fannie Mae doesn't require an accounting of how it's spent.
You may be eligible for relocation assistance if you complete a short sale or a deed in lieu of foreclosure that's approved by Fannie Mae. In a short sale, the home is sold to a third party for less than owed on the loan. For a deed in lieu of foreclosure, you return the property to the lender on a deed. You can't receive relocation assistance if your home is foreclosed on.
You must leave your home undamaged, with fixtures intact and in "broom swept" condition, to receive the full incentive from Fannie Mae. The lender will subtract actual or estimated repair or cleaning costs from your incentive. For example, if you fail to remove all the trash from the home before you leave and the lender pays a removal service $150 to clear it, you'll get your incentive minus the $150.
Fannie Mae subtracts from the incentive amount any other forms of government relocation assistance you may receive, such as money you get because you're formally reassigned to a new location by the military. Your mortgage lender has to get written approval for Fannie Mae's relocation incentive if you've got official military reassignment orders but aren't receiving a dislocation allowance for it. The lender will also deduct from your Fannie Mae incentive any other relocation help you're receiving from a third party, such as cash from your employer.
You're ineligible for relocation assistance from Fannie Mae if you have to give money to or sign a promissory note with your lender regarding your short sale or deed in lieu of foreclosure. You can receive more than Fannie Mae's incentive amount if you're receiving money from your lender; money from the lender isn't deducted from your Fannie Mae incentive. For example, if you received a $500 relocation grant from your lender in 2013, you could still receive the full $3,000 from Fannie Mae, for a total of $3,500.
Anna Assad began writing professionally in 1999 and has published several legal articles for various websites. She has an extensive real estate and criminal legal background. She also tutored in English for nearly eight years, attended Buffalo State College for paralegal studies and accounting, and minored in English literature, receiving a Bachelor of Arts.