Nov. 1, 2018
Our Home Partner provides responsible households a transparent path to home ownership through its Lease with a Right to Purchase Program for the Orlando FL Market. The program provides three to five years of rent certainty with an initial financial commitment of just one year. This is a legitimate rent-to-own program that can help a customer that can not qualify for a mortgage loan due to prior issues with their credit. You will be able to get into this program if your credit score is above 600 irregardless if you declared bankruptcy or short sale. Below is a summary of the program.
Lease with a Right to Purchase Program:
- Prospective Customer applies for approval - I will send you a secure link to apply on line
- Prospective Customer finds a qualified home based on zip code
- Our Home Partner buys the qualified homes, and the prospective customer leases from our Partner
- Customer will have the right to purchase the home at any time up to five years from start of lease
How the math works:
The Math - Total Cost
Total Cost is the price Home Partners pays for the home, closing costs, make ready and repairs/maintenance costs. Total Cost is used to determine the resident's Right to Purchase prices. A sample is highlighted below:
- Purchase Price $200,000
- Closing Costs * $3,000
- Make Ready and Repairs/Maintenance Costs $7,000
- Total Cost $210,000
- * Includes costs such as transfer taxes, attorneys' fees, title insurance, other acquisition costs, etc.
Monthly Rent Increases:
Each year, a resident's Monthly Rent increases by no more than 3.75% over the previous year’s Monthly Rent. See Below:
For example, if the Monthly Rent for Year 1 is $1,400 per month, the increase for the next year is $50/month (i.e., $1,400 x 1.0375)*.
Year 1 $1,400
Year 2 $1,450
Year 3 $1,500
Year 4 $1,560 (Does not apply in Texas)
Year 5 $1,620 (Does not apply in Texas)
Right to Purchase Price Increases:
Each year, the Right to Purchase Price increases by 3.5%-5% (depending on the region).
In the example, if the Total Cost of the home is $210,000 and if the Right to Purchase increases by 5% (i.e., Prior Year Purchase Right Price x 1.05)* then the Purchase Right Price for Years 1-5 is as follows:
Year 1 $220,500
Year 2 $231,500
Year 3 $243,100
Year 4 $255,300 (Does not apply in Texas)
Year 5 $268,000 (Does not apply in Texas)
There are additional costs that the resident will incur if they exercise the Right to Purchase such as closing costs to purchase the home, including transfer taxes, attorneys' fees, title insurance, and the cost of a mortgage loan. As a result, actual total costs to exercise the Right to Purchase will vary.
* Rent will round to the nearest $10. Right to Purchase Price will round to the nearest $100.
You will need to sign an lease Agreements:
The initial term of the Lease is generally one year, and the Lease automatically renews every year as long as the resident is in compliance with the Lease and Right to Purchase Agreement. Each year, the resident has the right to give notice that he/she does not want to renew the Lease for another year. If for any reason the resident decides to leave the home at the end of a Lease term and is in compliance with the Lease, the full security deposit will be returned.
The resident's financial commitment is limited to the initial term of the Lease. The resident does not have to renew the Lease after the initial term. The maximum number of years of the Lease is five in most states and three in Texas.
Over the life of the Lease, subject to applicable laws, Home Partners expects residents to treat the home as their own, maintain the lawn and garden, remove snow or debris, and complete minor repairs.
Right to Purchase Agreement
The resident's Right to Purchase Agreement (and therefore Right to Purchase) is in effect as long as the Lease is in effect, and the resident is in compliance with these two agreements.
The Right to Purchase Agreement gives the resident the right to purchase the home from Home Partners at a pre-defined price for each year of the Lease, as long as the resident is in compliance with the Lease and the Right to Purchase Agreements. The maximum number of years a resident can rent the home and have the Right to Purchase is five years in most states and three years in Texas. The Right to Purchase does not obligate the resident to buy the home.
Maintenance Adjustment Included in Purchase Price
The purchase price in your Right to Purchase, as set at the time you enter into the lease, will include an adjustment equal to $2,500 (a “Maintenance Adjustment”). If you choose to purchase the home, and the maintenance costs covered by the Maintenance Adjustment actually incurred by Home Partners during the lease are less than the Maintenance Adjustment, the purchase price of the home at closing will be reduced by the unused amount of the Maintenance Adjustment.
The Maintenance Adjustment generally may be used to cover the cost of any repairs, renovations, replacements or improvements to the home that Home Partners determines are necessary or appropriate during your lease term. Examples of the costs for which the Maintenance Adjustment may be used include the replacement of a major mechanical system (e.g., HVAC, furnace, roofing) or the repair of appliances, plumbing or fixtures. Home Partners generally is responsible for costs of home repairs in excess of the Maintenance Adjustment and those excess costs will not increase the purchase price for the home.
However, the Maintenance Adjustment does not limit your responsibility for any costs for which you would be responsible under the terms of the lease. Examples of these costs are costs due to your misuse of the home, your willful or negligent conduct, or your failure to comply with the lease. Home Partners may require you to pay these other costs separately in accordance with the terms of your lease.
Your rent is not affected by the Maintenance Adjustment, and the Maintenance Adjustment does not affect you unless you purchase the home. For example, if Home Partners pays repair costs of $2,500 during the lease term that are covered by the Maintenance Adjustment, and you choose not to buy the home, you will not be required to reimburse Home Partners for those amounts.
Generally within 48 hours of a seller accepting Home Partners' offer for the purchase of a home, prospective residents will be required to sign the Lease and the Right to Purchase Agreement and provide the deposit, all to be held in escrow, pending the closing of the purchase of the home by Home Partners
Prospective residents will have an opportunity to review all documentation, and Home Partners encourages all prospective residents to consult with legal and tax advisers to review such documents and the transaction prior to signing any documents.
You will need funds to pay the Right to Purchase price if you exercise the Right to Purchase. Typically, you will need the amount of the down payment and you will need to obtain a mortgage loan from a third party. Among the key considerations that a prospective resident should consider include:
The value of the home may not increase above the price at which the resident has the Right to Purchase (i.e. the Right to Purchase Price may be higher than the value of the home).
The resident may not be able to exercise the Right to Purchase because he or she may not have the down payment or qualify for a mortgage loan from a third party.
Home Partners is not a mortgage company, does not have any obligation to provide or arrange a mortgage loan, and cannot guarantee that a resident will be able to obtain a mortgage loan.
Home Partners provides responsible households a transparent path to home ownership through its Lease with a Right to Purchase Program. The program provides three to five years* of rent certainty with an initial financial commitment of just one year.
How It Works
Prospective Household applies for approval
Household finds a Home Partners qualified home
Home Partners buys the qualified home, household leases from Home Partners
Household has the right to purchase the home
Standard Residential Lease - Home Partners Lease with a Right to Purchase
Sign A Lease
Financial Commitment Limited to 1 Year
Security Deposit Required
Rental Rate Certainty Typically 1-5 Years
Right to Purchase
Mutual Responsibility to Maintain Home
Right to Purchase the Home at a Predetermined Price
Pick from Many* Homes Available