How to Write a Short Sale Hardship Letter (What the Servicer Actually Reads)
The hardship letter is one page, dated, factual, and matched to a box on Form 710. What servicers check, what they ignore, and a plain outline.
A hardship letter is a one-page, dated explanation of why you can no longer pay and why the house cannot be kept. The servicer reads it next to your application and bank statements, so the letter that works is the one that matches them. It is not a plea. It is the story that makes your numbers make sense.
This page covers the letter for a short sale on a first mortgage. If you are still deciding between selling and staying, start with can I sell my house if I am behind on payments and come back.
What the servicer is actually checking
Servicers process hardship in a form, not in prose. On Fannie Mae and Freddie Mac loans that form is the Mortgage Assistance Application, Form 710. Its hardship section asks three things: If a borrower has died and you are the surviving spouse, start with what happens to the mortgage now.
- When the hardship began.
- Whether it is short-term (up to six months), long-term or permanent (more than six months), or already resolved.
- Which category it falls in.
The categories, and the documents each one requires, are printed on the form itself:
| Hardship type | Documentation Form 710 requires |
|---|---|
| Unemployment | Not required |
| Reduction in income (lost overtime, fewer hours, pay cut) | Not required |
| Increase in housing-related expenses (uninsured loss, higher property taxes, HOA special assessment) | Not required |
| Disaster affecting the property or your workplace | Not required |
| Long-term disability or serious illness of a borrower or dependent | Written statement; no medical detail needed |
| Divorce or legal separation | Final decree or separation agreement, or a recorded quitclaim deed |
| Separation of unmarried co-borrowers | Recorded quitclaim deed or a binding agreement giving up the property |
| Death of a borrower or wage earner | Death certificate, or obituary |
| Distant employment transfer or new job | Offer letter or transfer notice, plus proof of any relocation money paid |
| Other | Written explanation and any relevant documents |
Your letter should name one of these categories in the first paragraph, using the same words. The reviewer is looking for the box, and a letter that helps them find it moves faster.
FHA, VA, and portfolio lenders use their own forms, but the logic is the same: date, duration, category, evidence.
Why the letter still matters
If the form does the sorting, why write anything? Two reasons.
First, the form’s “long-term or permanent” box is what separates a short sale from a repayment plan. A servicer must evaluate you for the options that keep you in the house before it approves a sale. If your letter shows that the income is not coming back, the retention review ends quickly and the sale review begins. If it is vague, you may be offered a modification you cannot afford and lose weeks proving it.
Second, the letter explains anything the paperwork cannot. A large deposit that was a family loan. A gap in pay stubs. A second address on your credit report that is a relative’s home. Each of those triggers a question. Answer it before it is asked.
The one-page outline
Keep the whole letter to a page, dated and signed by every borrower on the loan.
Paragraph 1: what happened and when. One or two sentences. “In March 2026 my employer closed its Boca Raton office and my position ended. I have been receiving unemployment benefits since April.” Name the Form 710 category.
Paragraph 2: what you did about it. Show effort. New job search, a second job, cutting expenses, using savings. Include the date you fell behind and how many payments you have missed.
Paragraph 3: why the house cannot be kept. This is the paragraph that supports a short sale. State the new income, the full monthly housing cost including taxes, insurance, and any association fee, and the fact that the balance exceeds what the house would bring. If you have already listed the property, say so.
Paragraph 4: what you are asking for. “I am requesting approval of a short sale and a release from any remaining balance.” One sentence. Do not negotiate terms in the letter.
Then sign and date. Attach the documents the form requires for your category and nothing extra.
What to leave out
- Blame. The servicer does not decide who was at fault.
- Medical details. Form 710 says they are not required; a sentence that you were treated for a serious illness is enough.
- Promises to catch up. If you could, you would not be writing this letter.
- Anything the bank statements contradict. The application is signed under a truthfulness certification.
What happens after you send it
On a Fannie Mae loan the servicer must acknowledge a short sale offer within five business days and answer a complete package with an offer within 30 calendar days (Servicing Guide D2-3.3-01). Timelines on other investors differ, but every reviewer works faster on a complete, consistent file. Our short sale documents checklist lists what goes in the package with the letter, and after short sale approval covers what the approval letter must say before you sign it.
If you are not sure the sale is the right move, a HUD-approved housing counselor will review the letter and the numbers with you for free. See how a HUD housing counselor helps.
This page is general information for Florida homeowners and is not legal or tax advice.
Common questions
Do I still need a hardship letter in 2026?
Usually yes, but it is shorter than it used to be. Fannie Mae and Freddie Mac loans use the Mortgage Assistance Application (Form 710), which has a hardship section with check boxes and a place for a written explanation. Most servicers still ask for a separate signed letter to go with it, and the letter is where you tie the boxes to your dates.
How long should the letter be?
One page. Three or four short paragraphs: what happened and when, what you did about it, why the house cannot be kept, and what you are asking for. Longer letters are skimmed, not read.
What counts as a hardship?
Form 710 lists the categories the big investors recognize: unemployment, a reduction in income, an increase in housing costs outside your control, a disaster, long-term disability or serious illness, divorce or legal separation, separation of unmarried co-borrowers, death of a borrower or wage earner, a distant employment transfer, and an 'other' box with a written explanation.
Do I have to prove the hardship with documents?
It depends on the category. On Form 710, unemployment, reduced income, higher housing costs, and disaster need no extra paperwork. Illness needs a written statement (no medical detail required), divorce needs the decree or a recorded quitclaim deed, a death needs a certificate or obituary, and a job transfer needs the offer letter plus any relocation money you were paid.
Should I say I want to keep the house?
Only if it is true. If you are asking for a short sale, say the house cannot be kept and why. A letter that asks for a modification and a short sale in the same paragraph reads as undecided, and the servicer will evaluate you for the retention options first anyway.
Can the letter hurt me?
Yes, if it is inaccurate. You sign the application under a certification that the information is truthful. Do not round income down, hide a second property, or describe a hardship that the bank statements contradict. Accuracy is more persuasive than sympathy.
Find out if your property qualifies
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This page explains the real estate process only and is not legal, tax, or financial advice. Consult a licensed attorney or tax professional about your situation.