If you're a family member or somehow related to a property owner who is selling his property as a short sale, you can't buy it.
Here's a good post about this http://homebuying.about.com/od/shortsale/f/arms-length-affid
What Does an Arms-Length Affidavit Contain?
Most banks create their own arms-length affidavits. Therefore, the language can vary from one affidavit to another. Following are the points contained in a basic arms-length affidavit:
â€¢The arms-length affidavit references the property address, name of the sellers, buyers and agents, and the fact this is an arms-length transaction.
â€¢No party to the short sale contract is a family member, business associate or a person who shares a business interest with the seller.
â€¢There are no hidden terms nor special agreements among the buyers, sellers and / or agents.
â€¢Once the transaction closes, the sellers will not rent back the home nor regain title to it.
â€¢None of the parties will receive any compensation except for the commission paid to the agents.
Hope this helps