Cash for Keys: How to Get Money for Moving Expenses

Banks sometimes agree to provide this help for those in foreclosure

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Banks may offer you money for moving expenses if you're the owner or renter of a home in foreclosure—one that's been seized by the lender for failure to keep up with mortgage payments. This process is called "cash for keys," and it can help make leaving a foreclosed property a little less stressful.

Key Takeaways

  • Cash for keys is an agreement that people in a foreclosed house will move out and leave the house in good condition in exchange for moving money.
  • The amount of cash given is usually a few thousand dollars and depends on how fast the occupants move out. 
  • Lenders may offer cash for keys in order to avoid long and expensive eviction proceedings.
  • Homeowners should make sure the cash for keys agreement frees them from paying back the mortgage balance before signing.

An Agreement to Vacate on Good Terms

At the heart of "cash for keys" is a written agreement between the occupants of the house and the lender stating that they will move out by a certain date and leave the house in good condition.

The agreement includes a promise from the occupants that they won't vandalize the property or strip the home of light fixtures, appliances, or copper. They also must promise not to leave any pets or personal belongings behind and to clean the house thoroughly—what's often called "broom clean" or "broom swept" condition.

"Cash for keys" is often preceded by an eviction notice stating the occupants will be removed from the property if they don't vacate it. Lenders don't automatically offer "cash for keys," and they are under no obligation to do so. The occupants of the home will often have to contact the lender to request the moving money.


Landlords may also offer "cash for keys" arrangements to tenants who are being asked to vacate. This is legal in all 50 states.

Amounts and Timing

If the lender makes a "cash for keys" offer, it's typically a few thousand dollars—enough to cover at least some of the reasonable expenses involved with moving out, such as the security deposit at a new location and the cost of hiring a moving company.

The amount may depend on how fast the occupants move out. An immediate move could get them much more money—say $3,000—than one that takes a month, which could gain them only $500 or so. And some lenders may insist that the move happens quickly and so will offer cash only for a speedy exit.

The lender will also consider the value of the home and the amount it could reasonably expect to get from selling it. In California, "cash for keys" agreements typically range from $500 to $5,000.

Avoiding Court

Lenders are sometimes willing to pay this money to avoid the lengthy and costly court proceedings that are often required to evict the occupants of a home. They also don't want to have to repair any damage to the home caused by people who are angry at the foreclosure.

The money will be given only after a final inspection of the property is completed and the keys are handed off to a representative of the lender.

Giving Up Ownership

Keep in mind that in most cases, when homeowners sign a "cash for keys" agreement, they're acknowledging the lender is now the rightful owner of the home. The homeowners may no longer be able to defend themselves in the foreclosure lawsuit the lender has filed against them and are consenting to judgment. Before signing, homeowners should make sure the agreement frees them from paying back the balance they still owe on the home.

Homeowners should also keep in mind the tax consequences of a "cash for keys" arrangement. Your lender will report the payment to the IRS, and homeowners will need to report the payment as income. Those who are receiving any form of assistance should check whether accepting "cash for keys" will impact their eligibility. Homeowners should also consider setting aside 20% to 30% of their "cash for keys" payment to cover taxes.

If homeowners have doubts about whether a "cash for keys" agreement is in their best interest, they should consult an attorney before signing. Those who can't afford an attorney should contact a HUD-approved housing counselor for advice. Local legal aid groups may also be able to assist.

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  1. Nolo. "What's 'Cash for Keys' in a Foreclosure?"

  2. MPR News. "Lenders Offer 'Cash for Keys' to Speed Foreclosures."

  3. DRE. "'Cash for Keys'—Information for Consumers and DRE Licensees."

  4. Policygenius. "What Does Cash for Keys Mean?"

  5. Internal Revenue Service. "Cash for Keys Program."

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