CHICAGO, Nov. 28, 2017 /PRNewswire/ — Home Partners of America (“Home Partners”) and New Penn Financial are pleased to announce a new pilot, the “Ownership Conversion Pilot,” to help qualifying first-time homebuyers succeed in their path to homeownership.
Many first-time homebuyers are unable to purchase a home today because of high down payment requirements, financial circumstances such as student debt, or the need to build credit. In this pilot, residents in Home Partners’ Lease Purchase program who are first-time homebuyers and meet Fannie Mae’s eligibility requirements may work with New Penn to use any home price appreciation of the home they rent towards their down payment at purchase.
How it Works
Under Home Partners’ Lease Purchase program, approved applicants work with a licensed real estate agent of their choosing to select the right home for them. Applicants can choose from a wide portfolio of homes available for sale across the country that meet Home Partners’ criteria. Home Partners purchases the selected home, leases the home to the resident with pre-determined rents and provides a right-to-purchase at pre-set prices for a defined future period (three to five years). While the resident’s only financial commitment is to lease the house for one year, he or she may renew the lease for additional one-year terms (generally three to five years).
Current and new residents in Home Partners’ Lease Purchase program are eligible to participate in the Ownership Conversion Pilot and may have the opportunity to take advantage of any appreciation equity once they have demonstrated 24 months of consecutive on-time payments, completed home ownership education or counseling, and meet other underwriting and eligibility criteria. Since this is a test and learn opportunity, the pilot will be available until late 2019.
Residents who participate in this pilot could benefit from features and requirements that include:
If the home goes up in value during the rental period, the resident could receive the benefit of appreciation when it comes time to purchase the home; Residents may qualify for a mortgage using as little as their security deposit as a down payment or towards closing costs; The rental period gives residents time to prepare for homeownership, repay other debts, such as student loans, or save for closing costs; and Residents are positioned for long-term success by being required to complete homeownership education or counseling.
Home Partners’ existing residents may be eligible for