Members now qualify for short sale assistance

JOINT BASE SAN ANTONIO-RANDOLPH, Texas — One of the hardships military members face when they have orders for a permanent change of station is selling their home.

That burden becomes even greater when their home is worth less than the balance of their mortgage, which is often the case in a difficult housing market.
Changes to short sale policies announced by the Federal Housing Finance Agency will soon assist military members with loans guaranteed by Fannie Mae or Freddie Mac, making it easier for them to meet their financial commitments to their lending institutions when they are required to move to another duty station.

"More and more military members are finding themselves upside down on their mortgage, so this is a great deal for them and their families," Lt. Col. Stephen Blake, Air Education and Training Command Asset Management Branch chief, said. "This new policy will enable members with upside down mortgages to avoid the financial strain of selling at a loss or maintaining a second home upon PCS."

Because of the policy changes, PCS orders will be considered a hardship, qualifying military members for a short sale. A short sale enables homeowners to sell their house and settle their mortgage debt even if the house is worth less than the balance of the mortgage.

In addition, service members will be exempt from deficiency judgments from Fannie Mae and Freddie Mac when receiving permission for a short sale and relieved of any request or requirement for a cash contribution or promissory note so long as the property was bought on or before June 30, 2012.

Blake said the program is important to service members because they do not have the ability to stay in their homes until the housing market stabilizes. If they were unable to sell their homes prior to this FHFA-sponsored program, they were obligated to continue making payments after relocating to a new duty station.

"The balance due is typically significant because the housing market has tumbled in recent years," he said. "Civilian homeowners can stay in their homes and ride it out. For military members, that is not the case. They don't have the option to ride out the market. With these policy changes, their credit is not affected and they are not responsible for making up the difference."

Blake said the program will become effective Nov. 1.

For more information, service members can call 1-800-7FANNIE or 1-800-FREDDIE, or visit the Fannie Mae and Freddie Mac websites, www.fanniemae.com and www.freddiemac.com.
Blake said base housing offices can also provide assistance.