Lease to Own Might Be the Answer You are Looking For
Assume a $225,000 Home
Optionee needs 8% down +/-: $18,000
(5% Option Money, 1st Mo. rent, Security Deposit, Inspection, Appraisal, Fees)
Rent will be around $ 1,800 (.008 X Sales Price+Property Taxes, Insurance and HOA Fees)
Similar to a financed home with an 8% interest rate
Acquired at $225,000
End of Year 1 – 6% appreciation – Value now $238,500
End of Year 2 – 6% appreciation – Value now $252,810
End of Year 3 – 6% appreciation – Value now $267,979
Optionee exercises the option to purchase at $267,979 (appraised value) Do they purchase at Appraised value and Home, LLP credits them back 50%? Yes
5% Option Fee is credited to purchase price = $11,250
50% of Appreciation is shared with Optionee = $21,490
Optionee now has equity of $32,740 (nearly 13%)
Optionee makes application for a loan with lender they choose on their own to acquire the home.
How Does the Road Home Work?
You choose the home that is right for you, your family and your life. You can do it on your own or have a realtor help. What matters most is you get to choose a home and a community.
If you qualify for our program, once you’ve chosen your home, we buy it for you, and together we decide what repairs or upgrades to make before you move in. You acquire an option to buy the home from us down the road.
Once we have bought the home of your choice, we lease it to you at a fixed monthly lease payment, giving you security and predictability. At any time after the first year of your lease, you can decide to buy your home.
What Makes The Road Home Unique?
What makes the Road Home different, and a true road to ownership, is that we work and benefit together. Although we buy the home, you invest in an option to purchase the home. It gives you the right to buy your home any time after the first year and before the end of your lease at a discount to the appreciated value of the home.
You share in the value appreciation of your home while renting because you get a credit for 50% of the appreciation if you buy. In other words, the Road Home starts working for you from day 1 of your lease.
Who Can Benefit From The Road Home?
We know how hard it is to get a loan, and too many who should qualify do not for a variety of factors. We started HomeLPC to help people like you start on the road to home ownership today.
The heart of our program is finding the right people from all walks of life who are ready to make the commitment to home ownership, and we have programs in place to help you travel the road with us to achieve it.
Almost anyone can benefit, especially if any of the following describe you:
What Kind Of Home Can Be bought?
Choices, choices, choices! Any home listed on a multiple listing service, available through private sale, foreclosure, or a short sale can qualify. The requirements are as follows:
Who Gets Approved?
The Road Home was founded to help people from all different backgrounds and life experiences, and you can secure pre-approval online in just minutes.
You do not have to meet stringent institutional lender guidelines and may qualify even if you have been rejected for a mortgage, have recently moved or changed jobs, are self-employed, have irregular or undocumented income, suffered credit challenges due to temporary job loss, foreclosure, short sale, or even bankruptcy.
You must, however, be able to demonstrate that your credit problems were temporary, that your credit is improving, and that you have the ability to make the monthly lease payments required under the Road Home. Not everyone will be approved or qualify.
Can We Be Approved If…?
Yes! Your ability to be approved for the Road Home depends on you meeting a minimum but flexible standard of credit, and even if you cannot qualify for a mortgage, you may still be approved for the Road Home.
If you aren’t sure whether you meet the requirements, fill out our pre-qualification form and find out instantly!
How Much Cash Do We Need?
While the amount of money required up front depends on the price of the home and any improvements required, as a general rule, your up-front cash requirements should be about 10% of the cost of the home and improvements, and can be as little as 5%.
Cash you pay at the start of the program is credited against your purchase price if you exercise your option.
What Are My Financial Obligations?
As a participant in the Road Home program, you are required to make regular monthly lease payments, carry liability insurance, pay for utilities, and maintain the home in good condition.
The total amount will depend on the cost and location of the home.
We will discuss this thoroughly with you during the approval and qualification process. HomeLPC, not you, will be responsible for major capital repairs such as the roof or heating and air conditioning systems.
What Happens If the House Needs Improvements Before or After We Move In?
Before you move in, we will agree upon the needed repairs and then HomeLPC will pay for them.
After you move in, if major improvements or capital repairs are required, e.g., roofing, HomeLPC will pay for them.
If you would like to make additional improvements to your home, you may do so once we all agree they will add long-term value to the property.
What Happens If I Need to Move or Do Not Want to Purchase the Home?
Your option to buy the home also allows you to sell the home to a third party. If the home has gone up in value, the value of your option will reflect your share of the increased value of the home—and upon sale, you will keep the profit and get your option payment back.
How is My Purchase Option Secured and Protected?
To make the Road Home as successful as possible for you and your family, we have worked with leading national and local real estate law firms to get the big picture and all the details just right. Specifically, your lease and your option act as a lien on the title to the property, which, if you choose, will be recorded in an official memorandum and submitted to the appropriate public records.
How Can I Find More Information?
After you complete the simple, on-line pre-qualification, a HomeLPC representative will contact you to discuss the next steps on your road to home ownership and answer any specific questions you might have. If you need additional information before filling out your pre-qualification form, please contact us and we will respond quickly. We look forward to helping you find the right home and community for your future.