Can I Sell My House While in Forbearance?
You can sell your house while in forbearance. The process will differ depending on your equity, and you may have options to stay in your home.
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Yes, you can sell your home while it’s in forbearance, but that doesn’t mean you need to.
That's especially true if you have equity in your home. If you’re underwater on your mortgage — meaning you owe more than the home’s value — a traditional sale may not be possible, but options like a loan modification or short sale can help you avoid foreclosure and financial strain.Here's what you should know if you're thinking about selling your house while in forbearance.
Understand the situation
You may be wondering if you can sell your house while in forbearance because you’re worried about being able to resume the monthly payments when the forbearance ends. Maybe you want to sell to take advantage of rising home prices, or you need to move for work. The process of selling your home while in forbearance would vary depending on how much your home is worth.
If your home is worth more than what you owe
If the value of your house exceeds what you owe, you should be able to sell your home while in forbearance, just as any homeowner would. The main difference is that you must pay the lender any missed or deferred payments from the sale proceeds in addition to the outstanding loan balance.
Since home prices have appreciated in recent years, most homeowners in forbearance should have enough equity in their house to sell at a profit. The average U.S. homeowner lost approximately $9,200 in home equity between the second quarter of 2024 and Q2 2025, according to data from real estate analytics firm Cotality. But that still leaves homeowners with about $307,000 in accumulated equity. That means many homeowners would likely be able to use the proceeds from a sale to pay off their mortgage balance in full.
If your home is worth less than what you owe
Selling your home in forbearance could be more complex in cases where you owe more on your home than it’s worth. If you can’t pay the difference out-of-pocket between the mortgage balance and the home’s value, you have two options to sell. But be aware, they both will negatively impact your credit score.
Short sale
A short sale is where you sell the home for less than what you owe on the mortgage. You may be eligible for a short sale if you don’t qualify for or cannot pursue a loan modification, but you must get your lender’s approval. You may also be required to pay the difference between the sales price and what you owe after the home sale is complete, aka the “deficiency,” but whether you’re responsible for this depends on what state you live in.
Deed-in-lieu of foreclosure
If you cannot sell your home through a short sale, a deed-in-lieu of foreclosure is a possibility. With a deed-in-lieu of foreclosure, you turn over the ownership of your home to the lender or investor in order to avert foreclosure. You will work with your lender to set a move-out timeline, and in some cases, see if you qualify for relocation assistance or a short-term rental arrangement.
If you want to refinance or buy another home after exiting forbearance, you may face a waiting period before you can do so. If you have a conventional loan, a Federal Housing Finance Agency rule says you have to wait three months after the forbearance ends before you can refinance or buy again. You also must be current on your mortgage for three months in a row under a forbearance plan or have repaid the total forbearance amount you owe.
Educate yourself on other options
If you have equity in your home, you may have options for exiting forbearance that don’t involve selling your home. Your eligibility will depend on the type of loan you have and your financial situation:
Mortgage refinance: Replaces your existing mortgage with a new one to lower your interest rate or monthly payments. Lenders will review areas like your credit score, debt-to-income (DTI) ratio and equity to determine whether or not you qualify.
Loan modification: Restructures your loan, potentially lowering payments and lengthening the loan term.
Repayment plan: Adds part of the past-due amount to your regular monthly payments for a limited time.
Deferral or partial claim: Maintains current monthly payment and moves the payments you missed to the end of your loan or puts the amount owed into an additional loan on the property, which you would have to pay back when you sell the home or refinance.
Reinstatement (lump sum payment): Requires paying back all you owe at once. Accept this option only if you know you can afford it.
Reach out for help
At least 30 days before your forbearance plan is set to end, your lender should contact you. If you don’t hear from your lender by the 30-day mark, make sure you get in touch with it.
Your lender is required to let you know when your forbearance plan is scheduled to end, list and describe all of the programs you qualify for, and refer you to at least one option for housing counseling services. If you decide to sell after reviewing your choices, the lender should give you the mortgage payoff amount, which is how much you owe to satisfy the loan.
The entire process can be confusing, but you don’t have to go through it alone. A HUD-approved housing counselor can help you weigh the pros and cons of selling your home.
One of the Department of Housing and Urban Development’s approved agencies can connect you to a housing counselor for free or at little cost. You can also find HUD-approved housing counselors by visiting the Consumer Financial Protection Bureau’s website.
Selling a house while in forbearance is possible. The amount of equity you have will determine how the sale proceeds. As you explore your options, consider other forms of assistance you may qualify for, and don’t hesitate to reach out to a housing counselor for guidance. Ultimately, taking the time to understand your choices can help you make the best financial decision for your future.
NerdWallet writer Isabella Angelos contributed to this story.