The Department of Veterans Affairs directed its mortgage servicers to provide $1,500 in relocation assistance to borrowers leaving their home after a short sale or a deed-in-lieu of foreclosure. The requirement took affect Jan. 6. The VA said it would reimburse servicers, but it would not be counted as part of the proceeds to the borrower. Servicers can only claim reimbursement up to the maximum guaranty the VA put on the loan plus the cost of reselling it as REO or short sale. Servicers must waive any amount on the loan that isn't covered by the VA guaranty claim and the larger of either the net value of the home or the short sale proceeds. In April 2010, the Treasury Department launched the Home Affordable Foreclosure Alternatives program to provide incentives to do short sales or DILs instead of foreclosure. Through HAFA, borrowers receive up to $3,000 in relocation assistance. The VA said it has been paying servicers an incentive to modify or forbearing loans on the verge of foreclosure for the past 15 years. The VA also urged servicers to follow recently revamped HAFA guidelines when considering a borrower for the short sale, which includes holding up the foreclosure process when making a decision. It also expects, not requires, servicers to notify eligible borrowers through a written agreement. "For servicers, the transfer of ownership via DIL or short sale is typically shorter than a foreclosure time period, and the property is left in better condition via DIL, which preserves the condition and value of the property by minimizing the time it is vacant and subject to vandalism and deterioration," the VA said in its directive to servicers. Write to Jon Prior. Follow him on Twitter: @JonAPrior