Rent-To-Own
With our “Lease-Purchase Program”, we can make homeownership possible!
How Does the Program Work?
We use a “Lease-Purchase Contract” for our Rent-To-Own tenants who want to become homeowners. The contract is usually for 1-3 years in length. At the end of the contract, you agree to purchase the home at a pre-determined price, using the lender of your choice. You will need to pay an upfront, non-refundable lease fee (similar to an earnest money deposit) and monthly rent. At the end of the contract, this fee and a portion of your rent will be applied as a down payment toward the home’s purchase.
How Do I Get Approved?
First, you must be approved as a tenant for the rental house you want to purchase. In addition to that, you need to fill out a questionnaire. We screen applicants, based on their current financial situation and how likely it is that they will be able to qualify for a loan at the end of the contract. If we don’t think you will be able to obtain a loan in the allotted time, we will not put you into a Lease-Purchase contract. Why not?… We don’t believe in setting people up for failure while lining our pockets.
What is the Length of the Contract?
We offer Lease-Purchase contracts ranging from 1 to 3 years in length, depending on your situation. For example, if you only need to bring up your credit score a bit to qualify for a mortgage, then we can structure a shorter-term lease. But if you need more time to become lender-worthy, then a 2-3 year contract may make more sense.
How Much is the Lease Fee?
The upfront fee you will be required to pay to activate your Lease-Purchase contract is variable and based on several factors, such as purchase price, monthly rent and length of the contract. The minimum amount required is $2,000. This fee is non-refundable, should you cancel or not complete the contract, just like an earnest money deposit. If you purchase the home by the end of the contract, the entire fee (and any additional rent credits) will be applied to your down payment.
How Much of my Rent Applies to the Purchase?
With a Lease-Purchase contract, your monthly rent will be higher than typical market rents for the area. A portion of your monthly rent will be credited toward the purchase price of the home. This is a great way to have more money applied to your down payment when you are ready to purchase. With that being said, the average amount of rent credit our clients receive is $200/month.
What if I am Unable to Purchase at the End of the Contract?
Sometimes, a client will come to the end of their Lease-Purchase contract and not be able to secure the funding needed to complete the purchase of the home. When that happens, they lose the exclusive right to purchase the home at the locked-in price. The Lease-Purchase contract becomes void and they revert to a standard rental lease, if they choose to stay in the house. They will also lose their lease fee and any rent credits accrued. This is a situation that we try to avoid through our screening process prior to executing a Lease-Purchase contract.
If this happens, and you have been a really conscientious tenant throughout the contract period, we may be able to offer you some options. Our ultimate goal is to create WIN-WIN situations, so we will work with you to try and find an equitable solution.
Interested in our Rent-To-Own Program?
Check out our Current Inventory of Homes