Lease with option to Purchase Programs
Visit www.brokerdarren/leaseoption for additional details about these programs.
Home Partners of America
This program is a lease with option to purchase for one year at a time. They will let you choose a house you wish to buy (they approve the property), they purchase the property and lease it out to you with an option to purchase the home in one year. You can renew the lease up to five years.
The person that this program works for is someone who wants to buy but cannot purchase today due to financial or personal obstacles. Typical obstacles to purchasing may be bankruptcy, divorce, medical expenses, loss of job, needing time to sell a currently owned home, or having been denied for a mortgage (and other reasons). There are many restrictions to the property, one being the price must be between $100,000 and $550000 with a minimum of two bedrooms. Home Partners website has many listed properties that they will approve for purchase. Visit their website at www.homepartners.com for additional details. Make sure and let them know who your Realtor® is as they assist you.
The difficulty with the program is that the monthly rent and right to purchase go up year to year. The monthly rent has a 3.75% yearly increase and the right to purchase option goes up 5% based on the purchase price of the property. So, if Home Partners buys a house and you lease it at a purchase price of $300,000, after the first year the purchase price would be $315,000
My opinion on this program is that it is very limited in nature for the buyer. If appreciation goes up in the neighborhood you are looking to purchase, then the 5% increase is covered. Rent increases are high so you won’t want to be in the lease for very long. This does let you “test the water” in experiencing living in the area and lets you secure a home you like now before prices go up. You really don’t lose if you back out of the lease when it comes up for renewal so if there is a house you like better for a better price—I can get you into that house instead of you staying in the lease. You still must qualify for the program, so getting started on that process is essential up front.
Trio
This program is newer to Colorado, and our office is one of the first to use the program. There are many benefits to this program, so let’s take a quick look at some of the details:
· No Down payment required.
· Earn home equity before you buy.
· Invest in your future. No more renting houses.
· Home ownership tools and counseling include.
· More details can be found at https://www.thinktrio.com/
Some of the program requirements include:
· 580+ minimum credit score.
· $3600 month household income. Trio will consider side jobs as income.
· Payment cannot exceed 1/3 of your household income.
· 24+ month housing history a plus.
· 2+ months saving ($4000 minimum).
· 50% maximum debt-to-income ratio.
The steps involved in the process:
· Apply
· Pre-qualify
· Find a home (my job), usually not older than 10 years old.
· Make the offer, get it accepted.
· Final approval.
· Sign the lease option, make the required deposits.
· Make first payment, close, move in.
· Buy when ready.
Trio has two primary programs: a 3-year lease option and a 1-5-year lease option.
My opinion on this program is that it suits a very limited number of clients. If your credit score is too low but above 580, or if you don’t have enough money for an FHA down payment and you don’t have VA eligibility then this program may work well for you. It gives you time and you accumulate the appreciation on the property so when you finance it you should have enough equity to not have much out of pocket when you purchase it. You can walk away at the end of the lease, but you will be subject to a fee (under $1000) and must pay for any damage you did to the property while it was yours. Call me today for additional information to see if this program works well for you.
