<prompt> Human: My wife bought a town house in Illinois back in 2008, right before the market took a huge hit. She wanted to live there for a few years, sell it, make a few bucks, then buy our forever house after we got married. Well, the market went down and in order to save up money for a new house, she moved back in with her parents and started renting the townhouse. All has been fine with it, as weve had different renters in there for the past 6 years or so. However, the association has been cracking down on renting lately, as about 40 of the units in the neighborhood are being rented out - most likely a lot of them for the same reason. They told us we were grandfathered in, but recent paperwork shows that we are only grandfathered in until the end of the current lease, which is up in Summer of 2017. At that time, we go to the back of the waiting list, until the percentage of units rented is under 30, which may not be for a long time.So our problem is that we cant afford to pay both mortgages as once. We have a cushion in our savings in the event we couldnt find renters immediately, but leases will take a while to end, and we cant afford to float it until we get below the 30 mark. In the event that next Summer we are put on a waiting list, we have a couple of options: Sell the townhouse. Closing costs alone will be just under 10k, plus the difference in what we owe and what it could sell for, we would have to come up with over 20k total to sell it most likely. I have that in my bank already, but with a kid on the way, I cant afford that. Short sale Foreclose. Do banks typically let me walk in and hand them the keys and have them take it as a short sale? I know it will be on my wifes credit for 7 years, but most likely will ding her for 24 months from what Ive read. How devastating is it to her credit? Her score is currently 829. We both have excellent credit, and only debt being one car loan, our main house, and her townhouse. I read that it can be UP TO 160 points. Is that accurate? It would suck, but not be as bad as some other people ending up in the 400s or 500s. What else should we know about if this ends up being the case?Any other advise? I can try to negotiate for a lower commission price if we sold it, but its still a ton of money to come up with, especially with a new kid on the way. I think we are more worried about the impact of her credit going down if thats what it comes down to. Weve always had excellent credit, good spending and saving habits, etc., which is why it bothers us to even consider a short sale on the property. Assistant: Thanks for the info. Im guessing itll be best to meet with a lawyer as well as our realstate agent to determine what the best action is as it gets a bit closer to next Summer.  <response>: I would also check the terms of the HOA and maybe ask your lawyer since the organization may not really have the legal teeth to enforce their provision on leasing. It may also be that you can find a loophole to allow you to lease it out e.g. hardship. 