Can I Rent Out My House While I Am Doing A Short Sale?

A common question of homeowners who are in the short sale process is whether they can rent out their primary residence or their investment property during the short sale process. In particular, the question is often, "Can I rent out the house, and keep the rent, even though I am not paying the mortgage?"

The answer is yes. You own the house, and are free to rent it and keep the proceeds, no matter whether you are paying your mortgage, or not.

Can I Rent My House to The Potential Buyer While The Short Sale is in Process?

The main concerns around renting your house to the prospective purchaser are hazard liability and eviction issues. As long as both parties are fully aware of the issues, and a rental agreement is drawn up addressing all issues and contingencies, there is nothing stopping a homeowner from renting the property to the prospective purchaser. It is recommended that you have your lease agreement reviewed by an attorney.

The act of renting out the property, to either a tenant, or the prospective buyer will not generally affect the short sale negotiation process. The HAFA program though, and most related HAFA programs run by Fannie Mae and Freddie Mac do require that the owner be occupying the property for participation in those programs.

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