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Rent To Own

REFINANCE YOUR RENT TO OWN HOME WITH AN FHA LOAN

Rent to own contacts take place between a tenant and landlord. Often times, when someone moves to our area with a short sale in their background, or previous forced foreclosure, had to move for a job and have credit issues in their past they will rent a home with an option to purchase agreement until their “waiting period” is over. FHA mortgage lenders provide the most flexible financing option for rent to own buyers. Learn how you can purchase a rent to own home with an FHA mortgage loan!

RENT TO OWN FHA MORTGAGE LENDERS APPROVALS WITH MINIMAL DOWN PAYMENT AND CLOSING FEES:

  • Down payment only 3.5% of the purchase price.
  • Gifts from family or FHA Grants for down payment assistance and closing costs OK!
  • Sellers can credit the buyer’s up to 6% of sales price towards buyers costs and pre-paid.
  • No reserves or future payments in account required.
  • FHA regulated closing costs.
  • Read more about buying a home with an FHA mortgage Bad Credit –No Credit – Investment –Second Home –Multi Family – 

RENT TO OWN FHA MORTGAGE LENDERS MAKE QUALIFYING EASIER BECAUSE YOU CAN PURCHASE:

  • 12 months after a chapter 13 Bankruptcy FHA mortgage Lender approvals!
  • 24 months after a chapter 7 Bankruptcy FHA mortgage Lender approvals!
  • 3 years after a Foreclosure FHA mortgage Lender approvals!
  • No Credit Score FHA mortgage Lender approvals!
  • 580 required for 96.5% financing or 3.5% down payment FHA mortgage Lender approvals.
  • 500 required for 90% financing or 10% down payment FHA mortgage Lender approvals.
  • Bad Credit with minimum 500 FICO credit score with 10% Down Payment FHA. For FHA mortgage applicants with credit scores between 500 and 579 must make down payments of at least 10% down!
  • Read more about FHA Qualifying Qualification Summary – Manual Underwrite – Collections-Judgement’s – Bankruptcy or Foreclosure – Compensating Factors –

RENT TO OWN FHA MORTGAGE LENDERS ALLOW HIGHER DEBT TO INCOME & EASIER JOB QUALIFYING

CONTACT AN FHA MORTGAGE LENDER BEFORE YOU ENTER A RENT TO OWN AGREEMENT- The rent to own agreement must be approved by the FHA mortgage lender. We recommend that if you are going into a “Rent to Own” scenario, you should call an FHA Mortgage Lender before entering into a rent to own or lease option contact.

FHA MORTGAGE RENT TO OWN GUIDELINES- If you are in a rent to own or a lease option contact, and plan on buying a home it’s important to know that there are different rules for different types of FHA mortgage loans and there are different laws that are state specific.

FHA Underwriters follow the FHA Mortgage Loan Guidelines for all Government home loan approvals in a rent to own or lease to own situation.

We often see Lease Option and Rent to Own situations when one partner has good income, but not great credit and the other occupant has good credit, but not very much income.

In most “Lease Option or Rent To Own” situations we see the renter is paying a higher than normal rent, and that “extra” amount is suppose to go towards the down payment when you are ready to formally buy the home. The Landlord is acting like a savings account for you.

When you apply for am FHA mortgage, we will order an FHA appraisal from through the FHA lenders list of approved appraisers. The appraiser will calculate the fair market rent for the property. Any money paid above and beyond the fair market rent will be used as a credit towards a future down payment. So, if the appraiser says the fair value rent for the home is $1000, and you pay $1500 a month then you will receive $500 for each month you paid that could be paid by the Seller as Down payment for you at closing!

What if the Appraiser doesn’t agree with the dollar amount you and the landlord negotiate as your “market rent” payment? That’s part of the problem.

If you are related to the owner there are additional considerations. The loan to value restriction is 85% if the parties are related, and it’s been a relatively short period of time you’ve been renting. FHA Mortgage Loans allow a gift so there’s really no benefit for doing this type of arrangement for a family member, simply have them give it to you as a gift?? However, if you go down the gift route, you must have rented for more than 6 months for the additional money you paid in rent to be count towards the down payment.

For NON related rent to own, lease option sales agreements, meaning you don’t have any relationship with the owner of the house except that you rent from them  FHA mortgage lenders require that  make a minimum down payment of 3.5% and not have to have a minimum rental period.

With an FHA mortgage you are required to verify that you make enough income to qualify for the FHA  mortgage payments. This is very specific with the new Frank Dodd law requirements. For example, in some cases where FHA mortgage applicants are self employed, and write off all of  their income  it can make it difficult to qualify. That’s not to say we can not approve self employed self employed borrowers just bring us all of your documentation, and we will figure out a way to make it work. We can often times use a non-owner occupied co-borrower in those cases.

If you’ve been renting for the last few years you might qualify for the First Time Home Buyer County Grant Program that offers rent to own tenants a down payment. They also have Mortgage Tax Credits available for those who meet the income restrictions and credit score requirements. In general, you will need a minimum 580 credit score to refinance your rent to own home with an FHA loan.

FHA RENT TO OWN INFORMATIONAL LINKS

FHA Mortgage Lenders By State: 
Florida   Texas  Georgia  Alabama  

FHA-MORTGAGE-LENDERS.COM – Specializing in FHA government mortgage solutions and delivering the most updated FHA information to the consumer. FHA-Mortgage-Lenders.com has an extensive lender network that allows us to provide flexible update FHA mortgage lenders information from portfolio FHA mortgage lenders providing a comprehensive selection of non-traditional FHA, VA, USDA, Conventional, for all including bad credit mortgage applicants.

FHA-Mortgage-Lenders.com is not a direct FHA Mortgage Lender. Information on this site Is for example purposes and should not be relied on for decision making.

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