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Cash for Keys: Why Smart Investors Pay Borrowers to Leave
Cash for keys pays an occupant to leave voluntarily instead of going through eviction or foreclosure. What it costs and more.
10 min read
Key Takeaways
- Cash for keys pays an occupant to voluntarily vacate a property, avoiding the cost, time, and unpredictability of a formal eviction or foreclosure.
- Standard-market offers typically run $500–$5,000, but can reach $15,000–$35,000+ in tenant-protective markets like Los Angeles, where the city’s own data shows an average payout of $25,068.87.
- Fannie Mae offers up to $7,500 in relocation assistance for a Mortgage Release (deed in lieu) or short sale; Freddie Mac runs a similar Cash-for-Keys program through HomeSteps.
- A formal eviction can cost $3,500–$10,000 in legal fees, lost rent, and property damage — cash for keys is often the cheaper, faster path.
- Everything should be documented in a signed agreement: move-out date, payment amount, required property condition, and a release of claims.
- This is a tool for a specific moment — when a note has already gone non-performing and the path forward involves taking back the property.
When a loan goes bad and a note investor ends up with the property instead of the payments, the occupant still living there is the next decision. Evict, and you’re looking at months of legal process, cost, and uncertainty. Or offer cash for keys — pay the occupant to leave voluntarily, on a set date, in reasonable condition — and skip most of that. It’s one of the most underused tools in a note investor’s post-default toolkit, and it’s exactly why experienced investors reach for it before ever filing an eviction.
Quick answer
Cash for keys is a voluntary agreement where a lender, investor, or property owner pays an occupant to move out by a set date, in good condition, instead of pursuing eviction. Standard offers run $500–$5,000 in most markets, up to $2,000–$20,000 in foreclosure situations, and considerably higher — $15,000–$35,000 or more — in tenant-protective markets like Los Angeles. Fannie Mae and Freddie Mac both run their own relocation-assistance programs, with Fannie Mae offering up to $7,500. It’s typically faster and cheaper than a formal eviction, which can run $3,500–$10,000 once legal fees, lost time, and property damage are added up.
What Is Cash for Keys?
Cash for keys is a voluntary arrangement: a property owner, lender, or investor pays an occupant — a former homeowner, a tenant, or anyone still living in the property — to vacate by an agreed date, leave the property in reasonable (“broom-swept”) condition, and hand over the keys. In exchange, the occupant avoids a formal eviction on their record and gets money to help with the move.
It shows up most often in three situations: after a foreclosure is complete and the former owner (or a tenant) is still in the home, when an investor buys an occupied property and wants vacant possession, and as part of a pre-foreclosure resolution like a short sale or deed in lieu.
Why Investors Use It Instead of Eviction
The math is usually straightforward. A formal eviction is cited to average $3,500 to $10,000 once legal fees, lost rent, and property damage are factored in — and that’s before accounting for the weeks or months the process can take. Cash for keys, offered at a fraction of that cost, can resolve the same situation in days.
The estimated savings cash for keys can provide over the total cost of a formal eviction, according to figures cited to the National Association of REALTORS®.
There’s also a damage-control angle: an occupant who feels pushed out through a contentious eviction has little reason to leave the property in good shape. An occupant who’s been paid to leave, with a clear agreement in place, generally has every incentive to hand it over broom-swept.
How Much Does Cash for Keys Typically Cost?
The amount varies enormously by market, urgency, and the occupant’s negotiating position.
| Situation | Typical range |
|---|---|
| Standard market | $500 – $5,000 |
| Foreclosure-specific (broader range) | $2,000 – $20,000 |
| Tenant-protective markets (e.g., Los Angeles) | $15,000 – $35,000+ |
| Los Angeles actual average (2019–2025) | $25,068.87 |
Why Los Angeles is different: The city’s Rent Stabilization Ordinance sets mandatory minimum relocation assistance for no-fault evictions, and the LA City Controller’s own public Cash-for-Keys dashboard shows negotiated buyouts routinely landing well above that statutory minimum. It’s a useful reminder that local tenant-protection law can move these numbers dramatically — always check the specific jurisdiction before assuming a national average applies.
Fannie Mae & Freddie Mac’s Official Programs
The two government-sponsored enterprises that back a large share of U.S. mortgages both run their own structured relocation-assistance programs, which is useful context even for investors working with private notes.
- Fannie Mae: offers relocation assistance of up to $7,500 to a borrower who completes a Mortgage Release (deed in lieu of foreclosure) or a short sale, contingent on leaving the property in broom-swept condition and free of personal belongings.
- Freddie Mac: runs a Cash-for-Keys program through its HomeSteps platform for occupants of foreclosed homes, with the same broom-swept condition requirement and a specified move-out date.
Neither program is a legal requirement — it’s a business decision each servicer makes, and terms can vary by year and by loan. But the structure (fixed relocation amount, condition requirement, specified date) is a useful template even for a private note holder negotiating a cash for keys deal independently.
How the Process Works
- Make contact. Reach out to the occupant directly, or through a real estate agent or attorney handling the property, to open the conversation before filing anything formal.
- Negotiate the terms. Agree on a payment amount, a move-out date, and the condition the property needs to be left in.
- Put it in writing. A signed cash for keys agreement should specify the payment amount and timing, the move-out deadline, required condition, and a release of claims.
- Confirm the handoff. Inspect the property against the agreed condition, exchange keys, and release payment as specified in the agreement — often split, with a portion due at signing and the balance at move-out.
Cash for Keys vs. Eviction vs. Foreclosure
| Path | Typical cost | Typical timeline |
|---|---|---|
| Cash for keys | $500 – $35,000+ (highly market-dependent) | Days to a few weeks |
| Formal eviction | $3,500 – $10,000 (legal fees, lost rent, damage) | Weeks to a few months |
| Foreclosure (if it comes to that) | Legal costs plus lost time on the asset | Averaged 563 days nationally in Q2 2026 |
See our exit strategies for a defaulted note guide for the fuller picture of what happens before it ever gets to this stage, including reinstatement, modification, and deed in lieu.
Legal & Practical Considerations
Cash for keys is not governed by a uniform national law — it’s a voluntary business arrangement, and the rules that do apply vary by state and city. A few things worth confirming before offering one:
- Local tenant-protection laws. Some jurisdictions mandate minimum relocation payments for certain kinds of evictions, and voluntary buyouts often need to clear that bar to be worthwhile for the occupant.
- Everything in writing. A verbal agreement leaves both sides exposed. The signed agreement should cover payment, timing, condition, and a release of claims.
- When to bring in a professional. An attorney or an experienced real estate agent familiar with local practice can help structure the agreement correctly, especially in markets with strong tenant protections.
Related reading: If the note that led here had lien or title issues that complicated the exit, our senior-lien checks guide covers how to catch those before you buy, not after.
Key Terms to Know
Broom-swept condition
A property left clean and free of personal belongings and debris — the standard condition requirement in most cash for keys agreements.
Relocation assistance
Another name for cash for keys, commonly used by mortgage servicers and government-sponsored enterprises like Fannie Mae and Freddie Mac.
Deed in lieu of foreclosure
A voluntary transfer of the property’s deed to the lender, often paired with relocation assistance as an incentive.
Mortgage Release
Fannie Mae’s specific name for its deed-in-lieu-of-foreclosure program, which includes relocation assistance up to $7,500.
Release of claims
A clause in a cash for keys agreement in which the occupant agrees not to pursue further legal claims related to the vacancy, in exchange for payment.
Frequently Asked Questions
What is cash for keys?
Cash for keys is a voluntary agreement where a lender, investor, or property owner pays an occupant to move out of a property by a set date, in reasonable condition, instead of going through a formal eviction or waiting out a foreclosure.
How much does cash for keys typically cost?
Standard-market offers typically run $500 to $5,000. Foreclosure-specific situations can range from $2,000 to $20,000. In tenant-protective markets like Los Angeles, payouts commonly reach $15,000 to $35,000 or more — the city’s own data shows an average of $25,068.87 across recorded agreements from 2019 to 2025.
Does Fannie Mae offer cash for keys?
Yes. Fannie Mae offers relocation assistance of up to $7,500 to borrowers who complete a Mortgage Release (deed in lieu of foreclosure) or a short sale, provided the property is left in broom-swept condition. Freddie Mac runs a comparable program through HomeSteps.
Is cash for keys cheaper than eviction?
Usually, yes. A formal eviction is often cited at $3,500 to $10,000 once legal fees, lost rent, and potential property damage are included, and cash for keys is estimated to save 40–60% of that total cost in many cases, while also resolving the situation faster.
Is cash for keys legally required?
No, cash for keys itself is a voluntary business arrangement, not a legal mandate. However, some cities and states have tenant-protection laws that set mandatory minimum relocation payments for certain no-fault evictions, which can effectively set a floor on what a voluntary buyout needs to offer to be worthwhile.
What should be included in a cash for keys agreement?
A written agreement should specify the payment amount and when it’s paid, the move-out date, the required property condition (typically broom-swept), and a release of claims. Verbal-only agreements leave both sides exposed if a dispute comes up later.
How long does the cash for keys process take?
Typically days to a few weeks once terms are agreed — much faster than a formal eviction, which can take weeks to months, or a full foreclosure, which averaged 563 days nationally in Q2 2026.
When would a note investor use cash for keys?
Cash for keys typically comes into play after a note has already gone non-performing and the resolution path involves taking back the property — through foreclosure or a deed in lieu — with an occupant still living there. It’s one option among several exit strategies for a defaulted note.
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Sources & References
- Fannie Mae. Fact Sheet: Helping Borrowers Avoid Foreclosure (Mortgage Release & short sale relocation assistance). fanniemae.com
- Freddie Mac / HomeSteps. Occupants of Foreclosed Homes. homesteps.com
- Kingside Investment Group, citing the Los Angeles City Controller’s Cash for Keys dashboard. How Much Should I Offer for Cash for Keys in Los Angeles? kingsideinvestmentgroup.com
- McGowan Mortgages. Cash for Keys Program: How It Works & What to Expect. (Eviction cost figures cited to the National Association of REALTORS®.) mcgowanmortgages.com
- ATTOM Data Solutions, via HousingWire. Foreclosures climb 21% in first half of 2026 as timelines shorten. housingwire.com
This article is for educational purposes only and does not constitute legal advice. Cash for keys practices, relocation assistance amounts, and applicable tenant-protection laws vary significantly by state, city, and lender, and change over time. Always consult a qualified real estate attorney familiar with local law before entering into a cash for keys agreement. © 2026 Paperstac.