VA Compromise Sale

DEPARTMENT OF VETERANS AFFAIRS COMPROMISE SALE PROGRAM
If the borrower is unable to sell the property for an amount that is greater than or equal to what
he/she owes on the loan, including closing costs, VA may pay a “compromise claim” for the
difference in order to allow the private sale to go through. The borrower can sell the property to a
buyer who gets his/her own financing or to a buyer who wants to assume the loan. However,
with a compromise assumption, the lender does have to agree to have the amount of its guaranty
reduced by the amount of the claim payment.

SUMMARY

VA CAN CONSIDER A COMPROMISE SALE WHEN ONE OF THE FOLLOWING FINANCIAL HARDSHIPS EXIST:
• VETERAN/SELLER EMPLOYER OR FINANCIAL SITUATION WILL REQUIRE HE/SHE TO RELOCATE.
• A DECREASE IN INCOME.
• MAJOR MEDICAL EXPENSE.
• THE DEATH OF A PRINCIPAL WAGE EARNER, SPOUSE OR FAMILY MEMBER.


SOME EXAMPLES OF WHAT IS NOT CONSIDERED A FINANCIAL HARDSHIP
• DESIRES A LARGER HOME
• NO LONGER LIKES THE NEIGHBORHOOD
• HOMEOWNER OWNS OTHER HOMES AND/OR HAS SUFFICIENT ASSETS HE CAN LIQUIDATE.
• THE PROPERTY VALUES ARE NO LONGER A SOUND INVESTMENT

For more details about the VA Compromise Sale click here to go to Veterans Administration.