To qualify for a short sale, a homeowner must first meet certain criteria set by the lender. The lender will typically evaluate the homeowner's financial situation and the condition of the property to determine whether a short sale is a viable option. Here are some of the steps a lender may take to qualify a homeowner for a short sale:

1. Reviewing the homeowner's financial information: The lender will typically require the homeowner to provide detailed financial information, including bank statements, tax returns, and proof of income and expenses. The lender will use this information to assess the homeowner's financial situation and determine whether they are eligible for a short sale.
2. Assessing the property value: The lender will typically order an appraisal or a broker's price opinion (BPO) to determine the current market value of the property. This will help the lender determine whether the proposed sale price is reasonable and whether a short sale is a viable option.
3. Evaluating the hardship: The lender will typically evaluate the homeowner's hardship, which is the reason why they are unable to make their mortgage payments. Examples of hardship may include job loss, divorce, medical issues, or other extenuating circumstances.
4. Reviewing the proposed sale terms: The lender will review the proposed sale terms, including the purchase price, closing costs, and real estate commissions. The lender will typically negotiate these terms with the buyer's agent to ensure that the proposed sale is in the best interest of all parties involved.
5. Approving the short sale: Once the lender has evaluated all of the necessary information, they will make a decision on whether to approve the short sale. If approved, the lender will typically issue a short sale approval letter outlining the terms of the sale and the amount they are willing to accept as payment in full for the outstanding mortgage balance.