LEASE TO OWN PROGRAMS

Advantages

• Provides you competitive cash offers to give you an edge in the market

• Covers your down payment and closings costs for initial purchase of the house

• Gives you time to build up your savings until you can buy the property back from the program

How Do They Work?

You choose and apply to the Lease to Own program you want to use.

Once approved, you work with a realtor to choose a house on the market that you want to buy. Keep in mind different programs will have different requirements about which properties are eligible for purchase.

The program will then make a cash offer on the property and buy it for you.

If the bid is successful, you can move into the home under a rental lease agreement with the program. This gives you time to build up enough savings for a down payment and closing costs to buy the property yourself.

Who Might Be A Good Fit?

Lease to own programs can be a good fit for people who...

• have lower credit scores and need time to build credit before purchasing a home

• need more time to save for a down payment and closings costs

• want to make a cash offer on a property to win a contract, but are unable to do so themselves

Important Details

Rent rates may not be fixed year after year -- check with your program to see how much rent might increase over time.

When you are ready to purchase the property back from the program, you will likely pay current market rate for the home, not the initial purchase price.

The longer you wait to purchase, the more money you may need for the down payment as housing costs increase.If you ultimately decide not to buy the property, check to see if there are any penalties or fees.

Comparing Programs

Home Partners of America

Divvy

Utopia

Home Partners of America

Eligibility

$40K+ annual income

620+ FICO Score

No Chapter 7 bankruptcy

No disqualifying criminal history

Minimum 45 days from
application approval to move-in date

Rental Period

Up to 5 years, with 1-year lease agreements for each year.

Application Fee

$75

How it Works

We show you our Anticipated Terms with 5 years of locked-in monthly rent amounts, buy back prices and estimated repair costs.

If you approve our terms, we submit a competitive cash offer to buy the home. If the seller accepts, you sign a 1-year lease and buy back agreement.

Do Rental Payments Apply to Home Purchase?

Real Estate Agent Required

Yes

Initial Down Payment and Buy-Back Down Payment

There are no initial down payments required for the program.

If you want to purchase the home, you'll need to secure a third-party mortgage loan and pay the stipulated down payment.

Cancellation

There are no initial down payments required for the program.

If you want to purchase the home, you'll need to secure a third-party mortgage loan and pay the stipulated down payment.

Divvy

Eligibility

$40K+ annual income

620+ FICO Score

No Chapter 7 bankruptcy

No disqualifying criminal history

Minimum 45 days from
application approval to move-in date

Rental Period

One 3-year lease

Application Fee

None

How it Works

You put down 1% to 2% of initial property price. This will go to your future down payment.

Part of your monthly rent will go to your down payment savings account.

Depending on credit score, you'll need to save 5% to 10% of the property's new market rate at time of purchase to buy the property.

Do Rental Payments Apply to Home Purchase?

Yes, except for clients with FICO Scores 650+ who opt out of this option.

Real Estate Agent Required

Yes. If you don't have one, they will connect you with one.

Initial Down Payment and Buy-Back Down Payment

FICO score tiers:

Under 600: 2% down / 10% buy back

Over 600: 2% down / 10% buy back

Over 650 has two options:

1) 1% down / 5% buy back

2) 2% down, manage your savings yourself, not through Divvy. This results in a lower monthly rent. Need 5% to buy back.

Cancellation

Divvy will refund accumulated savings, less a 2.0% re-listing fee.

Utopia

Eligibility

$3,500+ monthly household income

550+ FICO score

50% debt-to-income with rent

12 months timely rent payments

$2,500 upfront cash

3 months verifiable income

Rental Period

Up to 3 years

Application Fee

None

How it Works

You make an initial payment of 1% to 2% of the purchase price of the home. This goes to your future down payment.

Your monthly rental payments include built in saving contributions for your “Utopia Wallet” so you could have enough money to make down payment in 1 to 3 years.

If needed, we also assign you a credit coach to improve your credit score.

Do Rental Payments Apply to Home Purchase?

Yes, 25% of monthly payment is put in your home savings.

Real Estate Agent Required

Yes. If you don't have one, they will connect you with one.

Initial Down Payment and Buy-Back Down Payment

If you buy within 12 months, the buy back price will be 4.0% higher than original appraised value.

After 12 months, the price increases 1.0% every 3 months.

Cancellation

You can move out with 60 days notice.

You keep all your “Utopia Wallet” savings, less a 2.0% re-listing fee based on original appraised home value.

Eligibility

$40K+ annual income

620+ FICO Score

No Chapter 7 bankruptcy

No disqualifying criminal history

Minimum 45 days from
application approval to move-in date

$2,500+ monthly household income

550+ FICO score

3 months verifiable income

$3,500+ monthly household income

550+ FICO score

50% debt-to-income with rent

12 months timely rent payments

$2,500 upfront cash

3 months verifiable income

Rental Period

Up to 5 years, with 1-year lease agreements for each year.

One 3-year lease

Up to 3 years

Application Fee

$75

No application fee

How It Works