Many people want the benefit of living in a single family home. However, whether they're first-time homebuyers cautious about making such a large financial investment, someone who has recently relocated and is unsure of which neighborhood to live in, or someone who is creditworthy but cannot currently obtain a mortgage, they hope to one day buy a home but just aren't ready now.
When you consider a Lease with a Right to Purchase program, you expand your home rental options and put yourself on a new path to homeownership. If now isn’t the right time to buy a home, but you’d like more attractive options than what’s currently available in the rental market, this Lease with a Right to Purchase program could be a great alternative. This program allows prospective buyers the opportunity to rent a high quality home in a great community with a right to purchase (but not an obligation) in the future.
1. What is a Lease/Rent with a Right to Purchase program?
A Lease with a Right to Purchase program allows you to find a home that you want to rent initially, but may like to buy at any time within the next five years. You can lease the home for up to five years, and you may purchase the home at any time at a predetermined price in accordance with the Right to Purchase agreement.
2. Who is eligible for the Lease/Rent to Purchase program?
There are certain minimum criteria to be eligible to participate in this program. Your household must have an annual combined income of $50,000. You must have stable employment. You won’t be eligible to participate in this program if you or anyone in your household has a history of eviction or a pending bankruptcy. Everyone in your household will be subject to a criminal background checks.
3. How do I apply to the Lease/Rent to Purchase program?
Every member of your household who is 18 years of age or older must complete the Pre-Qualification Application and the Full Application. The Full Application requires certain information, including residence and employment history, for each member of the household. You also must provide income verification for each member of the household whose income is to be considered in determining the rent approval amount in order for your application to be considered complete. If you are moving from a different state or starting a new job, you will need to provide confirmation of your new job and income.
4. How much does it cost to participate in the Lease/Rent to Purchase program?
There is a one-time application fee of $75 (per household) that must be paid online as part of the application process. This fee covers all applicants in the household and is non-refundable.
5. Why might my application be denied?
Several factors are taken into consideration when an application is reviewed, which include household income, rent-to-income and debt-to-income ratio, rental and housing history, employment history, criminal history, and a FICO® score of 525+. The profile of the entire household is considered when an application is reviewed. A decision will be made on your application within 1 to 3 business days of receiving all required information. If your application is denied, you will receive notification in writing.
6. How do I find a home once I’m approved?
I will work with you to search for homes that meet the purchasing criteria. Generally, this means that the home should be:
- Located in an approved community and is not adjacent to features that may negatively impair value.
- Listed for between $100,000 and $450,000, though exceptions apply.
- Located on a lot no more than three acres with a minimum of two bedrooms.
- A single family home or fee-simple townhome; condo associations, condo interests, commercial and multi-family properties are not eligible for this program.
- A traditional sale. Short sales, auctions, and REOs are not eligible for this program.
- Free from material deficiencies.
- No guest houses or in-law suits with separate entrances.
7. Is there a required deposit?
Yes. Generally, a deposit is required and equal to two months’ rent. This deposit is not applied towards your rent. If you decide to leave the home at the end of any one-year lease term and you have been in compliance with the terms of the lease and return the home in the same condition it was in when you moved in (normal wear and tear excepted), the full deposit will be returned to you or credited to the purchase price if you buy the home. The full deposit is also returned to you if you exercise your Right to Purchase the home.
8. How long does it take from when I select a home to when I move in?
On average, it takes approximately five to six weeks from the time we enter into a purchase agreement for a home until the day you are able to move in. There are a number of variables that may affect the move-in timeframe, including the length of negotiation with the seller leading up to when we enter into a purchase agreement, what the home inspection reveals with respect to required repairs, and the renovations you request. You will be kept informed throughout the entire purchase and renovation process so that you are aware of this timing.
9. What happens once I move in?
You will have entered into a lease for one year and are bound to the terms of that agreement. You will take on the role of a tenant and your monthly rent will be collected.
10. Are the monthly rent payments that I make applied to the purchase price of the home?
No. Monthly rent payments are not applied to the purchase price of the home. If you decide to exercise your Right to Purchase, you must pay the full predetermined price as set forth in the Right to Purchase Agreement.
11. How do I exercise my Right to Purchase?
You may indicate AT ANY TIME that your lease is in effect that you would like to exercise your Right to Purchase. However, you must provide that notice in writing at least 60 days before you want to complete the purchase. In addition, the closing date must occur before the end of the applicable lease term. Once you have indicated that you want to exercise your Right to Purchase, the process will be initiated.
12. Do you provide me with a mortgage or other financing?
To exercise a Right to Purchase after entering into a lease, you must obtain your own financing, such as a mortgage loan from a third party lender or pay cash. This investor is not a mortgage company and will not provide or arrange a mortgage loan for you. They can’t guarantee that you will be able to obtain a mortgage loan if and when you wish to exercise the Right to Purchase.
13. Can I have pets in my home?
You are allowed up to three pets (cats or dogs) with a max weight limit of 180 pounds, total. For dogs, you must not have a Doberman, Pitbull, Rottweiler or Mastiff. Other animals such as pigs, horses, chickens, goats, etc. are not allowed. There is a $300 per pet fee. This fee is due with the required deposit and IS refundable in the event you purchase the home. Otherwise, it is not refundable.