It's no secret that many Phoenix-area homeowners are going into foreclosure these days. With the boom in the number of defaults on mortgages, it's understandable why many homeowners may think they're next. If Fannie Mae guarantees your loan and you did not qualify for President Obama's loan modification program, help may be more available than you think!
One approach Fannie Mae has developed is the Deed for Lease Program. For homeowners in danger of losing their homes to foreclosure and ineligible for loan modification, this program will be a lifesaver. The Deed for Lease Program moves homeowners into the category of tenants. Homeowners will have to give up their deed and begin making rental payments, but they will be able to stay in their current home. This is excellent news for those who have been concerned about an imminent foreclosure.
Homeowners must live in the homes as their primary residence, and some leases may be renewable on a monthly basis (instead of on an annual basis). If you're renting a home and your landlord's home is eligible for the program, you may also be able to participate. However, in either circumstance, you must be able to prove that the current rental market rate is no greater than 31% of your gross income.
Naturally, people will have questions about this program. Fannie Mae expected this, so they've put together a FAQs page that addresses issues such as sub-leasing, pets, tenant issues, and renter's insurance.
Even in light of new programs just announced to help people keep their homes, Deed for Lease could have its place. Not every homeowner at risk of foreclosure wants to keep their home. They may love the house, but know that they can't afford the other costs of ownership. Deed for Lease allows homeowner to plan for their family's future while paying rent on their old dwelling. The success of this program hasn't been released yet, but FHA must be onto something; recently mortgage giant Citigroup announced a pilot program in some states to try out their own version of Deed for Lease. From that standpoint of the bank (or FHA), the advantages are that the home would be occupied even as the bank might try to sell it and the costs would be less than foreclosure.
For more information about foreclosure alternatives or buy or sell a home in Phoenix, Mesa, Glendale, or surrounding areas, call Curtis Johnson Real Estate today. One call will convince you that Curtis's proven techniques will work for you.