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My home is underwater and I received a Permanent Change of Station (PCS) Order. Is there assistance to help me sell my home without owing money after the sale?

If your home is underwater and you have received PCS orders, you may be able to sell your home and not have to pay back the rest of your loan balance.

Your home may be “underwater” if you owe more on your mortgage than what your home is worth. Usually, if you sell your home for less than you owe on your mortgage, you still must pay the rest of what you owe on the mortgage.

Many mortgage servicers treat the receipt of PCS orders as a “qualifying hardship.” This means that you may be able to receive help through certain loss mitigation programs, such as a short sale program, even if you are current on your mortgage payments.

For example, Fannie Mae and Freddie Mac offer a short sale program for servicemembers with PCS orders. If your loan is owned by Fannie Mae or Freddie Mac, you purchased your home on or before June 30, 2012, and you successfully sell it through a short sale approved by your servicer, you will not be required to pay back any remaining loan balance. Your loan obligation will be satisfied by the proceeds from the sale. If your loan isn’t owned by Fannie Mae and Freddie Mac, similar programs still might be available to you.

As soon as you receive PCS orders, contact your loan servicer. Tell them you have PCS orders, ask what programs are available, and ask how to apply. Typically, you will need to submit an application, along with a copy of your PCS orders.

Tip: You may have to pay taxes on the debt that the lender forgives as part of the short sale agreement. Contact a tax advisor for more information. 

We always recommend contacting your local Judge Advocate General’s (JAG), or Personal Financial Manager’s (PFM) office to learn more about your mortgage options. You can use the JAG Legal Assistance Office locator , and/or PFM locator to find help. You can also ask your installation financial readiness office for information.

You can use the CFPB's "Find a Counselor" tool to get a list of U.S. Department of Housing and Urban Development (HUD)-approved counseling agencies in your area. Call the CFPB at (855) 411-CFPB (2372) to be connected to a HUD-approved housing counseling agency today.