How to Write a Hardship Letter for Loan Modification

In this guide, I’ll walk you through the process of crafting a compelling hardship letter, offering tips from my personal experience and a template to get you started.

Key Takeaways

  • Understand the Purpose: Recognize that a hardship letter is your chance to explain your financial difficulties and how you plan to overcome them.
  • Be Concise and Clear: Keep your letter focused and to the point, ensuring that your message is easily understood.
  • Provide Evidence: Back up your claims with evidence, demonstrating the legitimacy of your hardship.
  • Stay Professional: Despite the personal nature of the letter, maintain a professional tone throughout.
  • Use a Template: Follow a structured template to ensure you cover all essential aspects of your situation.

Step 1: Understand the Purpose of Your Hardship Letter

A hardship letter is a crucial document in the loan modification process, serving as your platform to explain why you’re unable to make your current mortgage payments due to unforeseen circumstances. The goal is to convince your lender that modifying your loan is not only necessary but also a viable solution that will enable you to continue making payments under adjusted terms.

Step 2: Gather Your Information

Before you start writing, compile all relevant information that will help you present a clear and concise case. This includes details about your financial situation, the specific hardship you’re facing (such as job loss, medical bills, or a natural disaster), and any supporting documentation.

  • Financial Details: Include income, expenses, debts, and assets.
  • Hardship Evidence: Gather documents that prove your hardship, like medical bills or a layoff notice.

Step 3: Writing Your Letter


Start by clearly stating the purpose of your letter. Identify yourself, your loan number, and briefly mention your request for a loan modification.

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  • Describe Your Hardship: Clearly and succinctly explain the nature of your hardship and how it has affected your ability to make mortgage payments. Be honest but avoid overly emotional language.
  • Detail Your Financial Situation: Provide a brief overview of your financial status, emphasizing changes that have led to your current predicament.
  • Explain Your Plan: Discuss your plan to get back on track, showing the lender that you have a strategy for future financial stability.


Conclude by reiterating your request for a loan modification, expressing your commitment to maintaining ownership of your home, and thanking the lender for considering your request.

Step 4: Review and Finalize

Proofread your letter to ensure it’s clear, concise, and free of errors. Attach any relevant documentation to support your case.

Personal Tips from Experience

  • Empathy is Key: Remember, the person reading your letter is human. While sticking to facts, let your genuine situation shine through to elicit empathy.
  • Follow Up: Don’t just send your letter and wait. Follow up with your lender to show your proactive approach and determination.

Real-Life Example

In one instance, I assisted a client whose medical emergency had led to a significant income reduction. We outlined the timeline of events, the direct impact on their finances, and a realistic plan for recovery. The clarity and sincerity of the letter paved the way for a successful loan modification.

Hardship Letter Template

[Your Name]
[Your Address]
[City, State, ZIP]
[Loan Number]

[Recipient’s Name]
[Lender’s Institution]
[Lender’s Address]
[City, State, ZIP]

Dear [Recipient’s Name],

I am writing to request a loan modification for my mortgage due to financial hardship. My inability to keep up with the current payment schedule is due to [briefly state the reason], significantly affecting my financial stability.

Despite my best efforts to manage my finances, [describe the hardship and its impact]. As a result, I am currently unable to meet my monthly obligation of $[amount], as my monthly income has been reduced to $[amount].

To address this, I am requesting a modification of my loan terms [specify the type of modification you are seeking]. I am committed to maintaining ownership of my home and am eager to find a solution that is beneficial for both parties.

Attached, you will find documentation that supports my situation, including [list any documents you are including].

Thank you for considering my request. I am hopeful for your understanding and am willing to discuss further details or alternative solutions you may propose.

[Your Name]

Last updated on March 25, 2024 / By 

Frequently Asked Questions (FAQs)

Q: What is a Hardship Letter for Loan Modification?

Answer: A Hardship Letter for Loan Modification is a document that borrowers submit to their mortgage lenders when they are facing financial difficulties and need to modify the terms of their loan. It is a formal letter that explains the borrower’s hardship circumstances and provides supporting documentation to request a loan modification.

Q: When should I write a Hardship Letter for Loan Modification?

Answer: You should write a Hardship Letter for Loan Modification when you are experiencing financial hardship and are unable to meet your mortgage obligations. This could be due to job loss, medical expenses, divorce, or other unforeseen circumstances that have impacted your ability to make your loan payments.

Q: What should I include in a Hardship Letter for Loan Modification?

Answer: In a Hardship Letter for Loan Modification, you should include the following information:

  1. Your contact information and loan details.
  2. A clear explanation of your financial hardship and the reasons behind it.
  3. Supporting documentation such as medical bills, termination notices, or divorce papers.
  4. A description of the steps you have taken to resolve your financial situation.
  5. A proposal for the loan modification you are seeking, such as a reduced interest rate, extended loan term, or principal forbearance.

Q: How long should a Hardship Letter for Loan Modification be?

Answer: A Hardship Letter for Loan Modification should be concise and to the point. Ideally, it should be no longer than one to two pages. Make sure to provide all the necessary details and supporting documentation, but avoid including irrelevant information that may distract from your hardship circumstances.

Q: What tone should I use in a Hardship Letter for Loan Modification?

Answer: It is important to maintain a respectful and professional tone in your Hardship Letter for Loan Modification. Be honest and sincere in describing your financial difficulties, but avoid sounding desperate or emotional. Stick to the facts and present your case in a clear and logical manner.

Q: Can you provide a sample Hardship Letter for Loan Modification?

[Sample Hardship Letter for Loan Modification]
[Your Name]
[Your Address]
[City, State, ZIP]


[Loan Servicer’s Name]
[Loan Servicer’s Address]
[City, State, ZIP]

Subject: Request for Loan Modification due to Financial Hardship

Dear [Loan Servicer’s Name],

I am writing to request a loan modification on my mortgage loan due to severe financial hardship. I am currently facing unexpected challenges that have significantly impacted my ability to make my monthly mortgage payments.

I have been diligently making timely payments on my mortgage for the past five years. However, [explain your hardship circumstances in detail]. This unexpected situation has created an immense financial burden, and I am struggling to meet my financial obligations.

To support my request, I have enclosed the following documents:

  • [List supporting documents, such as medical bills, termination notice, or divorce papers]
  • [Attach any additional relevant documents]

I have taken several steps to improve my financial situation, including [mention any efforts you have made to address the issue]. However, despite my best efforts, it has become increasingly difficult to sustain the current terms of my loan.

Therefore, I kindly request your consideration for a loan modification. I propose the following modifications as potential solutions to alleviate my financial burden:

  • [State the specific loan modification you are seeking, such as a reduced interest rate, extended loan term, or principal forbearance]

I truly believe that with these modifications, I will be able to continue making regular payments and regain financial stability. I am committed to honoring my obligations and keeping my home.

Thank you for your attention to this matter. I kindly request a prompt review of my request for a loan modification. I am available at [your contact information] if you have any further questions or require additional information. I appreciate your understanding and consideration during this challenging time.


[Your Name]

Q: How should I format a Hardship Letter for Loan Modification? 

Answer: When formatting a Hardship Letter for Loan Modification, it is important to follow a professional and organized structure. Here are some guidelines:

  1. Use a formal business letter format, including your contact information, date, and the recipient’s contact information.
  2. Begin with a formal salutation, addressing the recipient by name or their official title.
  3. Clearly state the purpose of the letter in the subject line or opening paragraph.
  4. Divide the body of the letter into paragraphs for ease of reading, covering each relevant point.
  5. Use a polite and professional tone throughout the letter.
  6. Conclude the letter with a polite closing and your name and contact information.

Q: Is a Hardship Letter for Loan Modification a guaranteed solution to my financial difficulties?

Answer: No, a Hardship Letter for Loan Modification is not a guaranteed solution. It is a formal request to your mortgage lender to consider modifying the terms of your loan based on your financial hardship. The lender will review your circumstances and documentation and assess whether a loan modification is feasible. It’s important to note that not all requests are granted, but submitting a well-prepared hardship letter increases your chances of a favorable outcome.

Q: Are there any alternatives to a Hardship Letter for Loan Modification?

Answer: Yes, there may be alternative options to a loan modification depending on your specific situation. You can explore options such as refinancing your loan, seeking forbearance, or pursuing a short sale or deed in lieu of foreclosure. It’s best to consult with your mortgage lender or a housing counselor to discuss all available options and determine the most suitable course of action for your circumstances.

Q: Should I seek professional assistance when writing a Hardship Letter for Loan Modification?

Answer: While it is not mandatory, seeking professional assistance, such as a housing counselor or an attorney experienced in loan modifications, can be beneficial. They can provide guidance on crafting a strong hardship letter, review your supporting documents, and help you navigate the loan modification process. Their expertise can increase your chances of a successful loan modification and ensure that your rights are protected throughout the process.

Q: Can I submit a Hardship Letter for Loan Modification online or via email?

Answer: The submission process may vary depending on your mortgage lender’s policies. Some lenders accept hardship letters through online portals or via email, while others may require physical mail or fax. It’s important to check with your lender to determine the preferred method of submission. If submitting electronically, make sure to follow their instructions regarding file formats, document attachments, and any specific guidelines they provide.