Expert Tips on Writing a Hardship Letter for a Short Sale

22 October 2025

If you're facing financial difficulties and considering a short sale to avoid foreclosure, one of the most crucial documents you'll need to prepare is a hardship letter.

This letter is your chance to explain why you can't meet your mortgage obligations and why your lender should approve the short sale. But writing it can feel overwhelming—where do you even start?

This guide will help you craft a compelling, persuasive, and heartfelt hardship letter that can improve your chances of getting lender approval.

📌 What is a Hardship Letter?

A hardship letter is a personal statement to your lender explaining your financial struggles and why you can no longer afford your mortgage payments.

It’s not just about stating the facts; it’s about telling a story—one that creates empathy and understanding from the lender’s perspective.

Unlike financial statements and tax returns, this letter humanizes your situation. Lenders deal with numbers all day, but when they read your letter, they should feel the weight of your hardship.

🏡 Why is a Hardship Letter Important for a Short Sale?

A short sale allows you to sell your home for less than the amount owed on your mortgage. But before a lender agrees to this, they need to see proof of genuine financial hardship.

A well-written hardship letter can:

✔ Explain your financial struggles in a clear and emotional way
✔ Increase the likelihood of lender approval for a short sale
✔ Provide lenders with a legitimate reason to accept less than the mortgage balance

Your story matters. If you fail to convince the lender, they may reject your request, leaving you with limited options—foreclosure being the worst-case scenario.

📝 Key Elements of a Strong Hardship Letter

To write a persuasive and impactful hardship letter, make sure to include the following elements:

1. Your Contact Information

At the top of the letter, clearly include:

- Your full name
- Property address
- Loan number
- Email and phone number

This ensures the lender knows exactly who you are and which property is being discussed.

2. A Strong Opening Statement

Start with a direct and clear request. For example:

"I am writing to formally request a short sale on my property due to severe financial hardship. Unfortunately, I am no longer able to meet my mortgage obligations due to circumstances beyond my control."

This sets the tone and immediately informs the lender of your intention.

3. A Genuine and Emotional Explanation of Hardship

This is the heart of your letter. Explain why you can’t afford your mortgage anymore.

Here are some common hardships that lenders consider valid reasons for a short sale:

- 📉 Job loss or significant income reduction
- 🏥 Serious medical expenses or illness
- 💔 Divorce or separation
- ⚠ Death of a co-borrower
- 🌪 Natural disaster damages

Example:
"After working for the same company for over a decade, I was unexpectedly laid off. Despite my best efforts to find new employment, my income has drastically decreased, making it impossible to keep up with my mortgage payments."

Be honest but concise. Stick to facts, but don’t be afraid to let your emotions show.

4. Your Financial Situation

Back up your explanation with financial details. Show how your situation has changed with numbers:

- Previous income vs. current income
- Major financial obligations (medical bills, child support, etc.)
- Past due mortgage payments

Example:
"Before my job loss, my monthly income was $5,000, but it has now dropped to $2,000. With a mortgage payment of $2,200, it is simply impossible to continue making timely payments."

5. Evidence of Attempts to Resolve the Issue

Lenders want to see that you’ve tried everything before requesting a short sale. Mention your efforts, such as:

✔ Applying for loan modification
✔ Looking for additional income
✔ Cutting down on expenses

This shows you're not just giving up but genuinely struggling.

6. A Respectful and Grateful Closing Statement

End on a positive, respectful note. Show appreciation for their time and consideration.

"I sincerely appreciate your time in reviewing my situation. I hope for your understanding and approval of my short sale request, as it is the best resolution for both myself and the lender."

Sign the letter with:
Sincerely,
Your Name

❌ Common Mistakes to Avoid

Many people make critical mistakes in their hardship letters that can hurt their chances of approval. Here are some pitfalls to avoid:

🚩 1. Over-Explaining or Writing Too Much

Keep your letter concise and to the point. Lenders review many letters, so a one-page letter is ideal.

🚩 2. Being Too Emotional Without Facts

Yes, emotions matter, but lenders also want facts and numbers to back up your claim.

🚩 3. Blaming the Lender

Avoid making accusations or blaming the bank. Focus on your hardship and your request.

🚩 4. Leaving Out Important Details

Don’t forget to include your loan number, contact information, and a clear request for a short sale.

🚩 5. Failing to Proofread

Typos and mistakes can make your letter look unprofessional. Double-check your grammar and spelling before sending it.

📌 Sample Hardship Letter for a Short Sale

[Your Name]
[Your Address]
[City, State, ZIP Code]
[Your Phone Number]
[Your Email Address]
[Date]

To: [Lender’s Name]
[Bank Name]
[Bank Address]
[City, State, ZIP Code]

Subject: Hardship Letter – Request for Short Sale Approval

Dear [Lender’s Name],

I am writing to formally request a short sale on my property located at [Your Property Address], as I am experiencing severe financial hardship. Due to [state your reason – job loss, medical expenses, divorce, etc.], I am no longer able to meet my monthly mortgage payments.

Previously, my income was [$X], but due to my financial situation, it has been reduced to [$X]. With monthly expenses including [list major financial obligations], I am struggling to stay afloat.

I have explored all possible alternatives, including applying for loan modification and reducing all non-essential expenses, but despite my best efforts, I am unable to meet my mortgage obligations.

Given my financial situation, I respectfully request your approval for a short sale. I believe this is the best option for both parties, as it will help minimize losses while allowing me to avoid foreclosure.

Thank you for taking the time to consider my request. I sincerely appreciate your review and look forward to your response.

Sincerely,
[Your Name]

🔥 Final Thoughts

Writing a hardship letter for a short sale can feel personal and stressful, but staying clear, truthful, and structured will improve your chances of approval.

Remember: Lenders want to help, but they need a compelling reason to do so. Use your letter to connect with them on a human level while providing the necessary factual evidence.

If you take the time to write a strong, heartfelt, and well-organized hardship letter, you will greatly increase your chances of securing a short sale and moving toward financial relief.

You got this!