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Rent to Own Housing is Becoming More Popular!

Posted on February 9, 2010
Filed Under Business, Real Estate, Self Help | Leave a Comment

Houses for rent to own are fairly easy to find in this market.  Many sellers are eager to offer this creative option on their home.  Typically, this is due to the home sitting on the market for months on end without selling.  In fact, in this economy, it is not uncommon for a home to sit on the market for months without so much as an offer! When sellers add their home to rent to own home listings, they often find that they are able to get a tenant buyer in the home in just a few weeks. This can offer a welcome relieve, particularly if the home is sitting vacant and the owner is carrying two payments.

Rent to own housing is becoming more popular among buyers as well.  This is largely because mortgage qualification has become so difficult.  It is next to impossible to get a mortgage without being able to verify your income.  This means that self employed individuals, even those with good credit, are having an especially difficult time buying a home. Additionally, credit standards have gone up dramatically since the days of subprime lending.  While FHA guidelines still allow for 3.5% down loans down to a 580 FICO score, the reality is that the FHA is not the one underwriting the loans the lenders are. All but the most aggressive of lenders requires a minimum credit score of 620.

A few years back, you could get 100% financing with a 600 credit score.  Now, chances are you can’t even get a loan!  This has caused buyers to look for other options such as renting to own.  Properly structured is can be a good stepping stone to home ownership.

As in any market, buyers still want to buy and sellers still want to sell.  They are just having to use creative real estate strategies to attain their goals.

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