Your loan payoff amount
Including arrears, late fees and foreclosure costs. Your servicer can provide it.
Facing foreclosure with equity in the house? Donation may be an option
Pre-foreclosure specialists: (888) 228-7320
Donating a House in Pre-Foreclosure
A notice of default is frightening, and it starts a clock. For some owners in pre-foreclosure, donating the house to Real Estate with Causes is a real option: when the house has meaningful equity above the loan, a donation can satisfy the lender at transfer and end the carrying costs. For owners without equity, the right conversation is with the lender, and we will say so on the first call.
Tell us about the property
Every property gets a look. Name, phone and email are the only required fields.
Fully IRS Compliant
We Handle the Paperwork
Form 8283 Done Right
501(c)(3) Recognized Charity
When a donation can work in pre-foreclosure
It comes down to equity. If the house is worth substantially more than the loan balance, arrears and costs, the loan can be paid off at transfer and the rest is a charitable gift. Because debt is involved, it is a bargain sale rather than a clean donation, and you may recognize gain on the debt portion.
We have to move within the lender’s timeline, so the earlier you call, the more room there is. A sale date that is weeks away is often too close.
When the numbers are tight, and other routes
If you owe close to or more than the house is worth, there may be little left to give once the loan is paid, and the stronger options usually run through your lender. In that case the options run through your lender: reinstatement, a loan modification, a short sale or a deed in lieu of foreclosure.
A HUD-approved housing counselor can walk you through those options at no charge. We will tell you honestly on the phone which route looks strongest for your numbers.
What to have ready when you call
Time matters, so the three numbers below are what we ask for first.
Any foreclosure notices
Notice of default, notice of sale and the sale date, if one has been set.
An estimate of value
A recent appraisal, a tax assessment or a rough sense of nearby sales.
Pre-foreclosure donation questions, answered
Can I donate my house to stop a foreclosure? +
Only if the house has enough equity for the loan to be paid off at transfer. Then the donation replaces the foreclosure. Without equity, a donation cannot stop it, and the right conversation is with your lender or a housing counselor.
Does the lender have to agree? +
The lender has to be paid in full at transfer, or agree to other terms. Most mortgages have a due-on-sale clause, so the loan is paid off when the deed moves. We coordinate the payoff with the servicer.
Will I get a tax deduction if the house was in foreclosure? +
Possibly, on the equity portion. Because the loan is paid from the property’s value, the gift is a bargain sale: part sale, part gift. The deduction covers only the gift portion, and you may recognize gain on the rest. Your advisor should run the numbers.
How much time do I need before the sale date? +
As much as possible. A donation involves an appraisal, a payoff statement and a recorded deed. If the sale is only weeks away, a donation may not be possible in time.
Will a donation affect my credit? +
Paying the loan off in full at transfer avoids a completed foreclosure, but missed payments already reported stay on your credit history. For credit questions, a housing counselor is the best resource.
We do not provide tax or legal advice. See IRS Publication 526, Publication 561 and the Form 8283 instructions, and consult your own advisor.
Related guides
Tell us where the loan stands and we will review it
Send the payoff amount, any sale date and a rough value, and we will tell you plainly whether a donation can work in time.