When pursuing a short sale, your hardship letter is one of the most important documents in the process. It’s your chance to explain to the lender why you can no longer afford your mortgage and why they should approve selling your home for less than what you owe.

A clear, honest, and well-organized hardship letter can mean the difference between getting approved or having your request denied. Here’s how to get it right.

What is a Short Sale Hardship Letter?

A hardship letter is a personal statement you write to your mortgage lender. It describes the circumstances that led to your financial difficulties and why you can no longer keep up with your mortgage payments.

The lender uses this letter to evaluate whether your situation meets the criteria for a short sale. It’s not just a formality—your hardship letter often plays a big role in the approval decision.

Common Hardships Lenders Accept

While every lender is different, these are some typical hardships that often qualify:

> Job loss or significant reduction in income

> Divorce or legal separation

> Serious illness or medical expenses

> Death of a spouse or primary earner

> Natural disasters that damaged the property

> Unexpected major expenses (like caring for a dependent)

It’s important to be truthful and provide documentation to back up your claims. Exaggerating or misrepresenting your situation could result in denial.

Tips for Writing a Strong Hardship Letter

Writing about personal hardships can be stressful, but keep it clear and professional. Here’s how:

Be concise: Aim for one page. Stick to the facts.

Explain your situation: Describe the hardship, when it began, and how it impacted your ability to pay.

Include financial details: Explain why you can’t continue making payments. (E.g., reduced income, high medical bills.)

State your desired outcome: Clearly request the lender to approve a short sale to avoid foreclosure.

Remain respectful: Even if you’re frustrated, keep a polite, professional tone.

Example Short Sale Hardship Letter

Dear [Lender Name],

Due to an unexpected job loss in January 2025, my household income dropped by over 50%. Despite actively seeking new employment and reducing our expenses, we have been unable to keep up with our mortgage payments of $2,100 per month.

We have fallen behind by three months and do not foresee being able to catch up. After consulting with a real estate professional, we believe a short sale is the best solution to avoid foreclosure and minimize losses for all parties.

Enclosed are supporting documents, including unemployment statements and our financial hardship worksheet. We respectfully request that you approve a short sale of our home at [Property Address].

Thank you for your understanding.

Sincerely,
[Your Name]

 

Mistakes to Avoid

Being too vague: The lender needs specifics.

Blaming the lender or market: Focus on your situation, not complaints.

Leaving out documentation: Always include pay stubs, medical bills, or other evidence.

Making it emotional: While it’s personal, avoid long stories. Keep to the facts.

 

What Happens Next?

After submitting your hardship letter along with other required documents, the lender will review your case. This can take a few weeks. In the meantime, you might want to explore more about the stages of a short sale so you know what to expect.

Need Expert Help?

Writing a hardship letter is just one step in the process. Our team at Short Sale Cooperative specializes in guiding homeowners through every stage of a short sale. If you have questions or need a free consultation, contact us.