Here’s some key info regarding changes to the lease-to-own program.
When ‘lease to own’ was introduced in 2011, the program sponsor would agree to purchase a home for
up to $600,000 and lease it out to a would-be buyer with bad or recovering credit but a qualifying income.
It was designed for people who had just gone through a bankruptcy, short sale, or foreclosure.
So long as you had the necessary, dependable income to pay rent each month, you could build up your credit while renting with the goal of eventually buying the house a few years down the line. While the program was good through five years, your obligation to lease was only through one year. In other words, if after one year you didn’t like the property or needed to move elsewhere, you could choose not to renew the agreement.
This program offered a great deal of flexibility for couples who were ready to settle in an area but didn’t have the passable credit to do so. Generally speaking, it takes most committed individuals about six months to a year to build up their credit enough to qualify for a decent interest rate. With the ability to purchase the leased property extending through five years, the lease-to-own program was great. So why am I bringing it up again?
Several years ago the sponsor purchase limit was brought down from $600,000 to $350,000, which, as you already know, is nearly impossible here in Southern California. As you can imagine, the practicality and popularity of this program greatly decreased in our area. Thankfully, they’ve recently increased that sponsor purchase limit to $500,000, which has once again created new avenues for a bigger pool of prospective tenants.
With that new limit, we can find plenty of homes for these buyers-in-progress. In the Lancaster and Palmdale area, for example, you can find a beautiful 2,500-square-foot home with a pool. Fontana and Rialto are on the table, too.
If you’re as excited about this information as I am, then please don’t hesitate to reach out to me by phone or email for more details and next steps. I’d love to help make the dream of homeownership a reality for you and your family. Let’s get the conversation started today!