01 Feb Our pick a home rent to own program
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You can lease a home in the area you want. You apply online to enter the program. Must have a minimum of 620 credit score and ability to make the payments. You simply shop for homes within the website that are for sale and fit the guidelines of the program.
You then live in the home for up to five years and you can purchase it any time during the lease term after the first year.
After I do the application and am qualified what happens next?
1)You search for homes within a large inventory of homes for sale that qualify for the program
2) You sign a lease with a one year commitment
3) A security deposit is required just like when you rent a home
4) You can rent this home up to 5 years
5) Any time after the first year you have the right to purchase the home at a predetermined price
6) Mutually responsible to maintain the home
WHAT ARE OTHER QUESTIONS?
1)How much can rent increase each year? No more than 3.75% a year.
2) How much can the right to purchase price increase each year. Currently it is 3.75% which is currently the Twin Cities average of 6%.
3) What if the house needs a little work at time of purchase? In the lease you can ask to have up to $2,500 to cover maintenance adjustments you would like done.
4) Who is eligible for the program?
We have certain minimum criteria for our program. Your household must have an annual income of $40,000. You must have stable employment. We cannot accept you into our program if you or anyone in your household has a history of eviction or a pending bankruptcy. Everyone in your household will be subject to a criminal background check.
5) How do I apply to the Program?
Anyone who is 18 years or older and will reside in the home must complete both the Pre-Qualification and the Full Application. The Full Application requires certain information, including residence and employment history, for each member of the household. You also must provide income verification for each member of the household whose income is to be considered in determining the rent approval amount in order for your application to be considered complete. If you are moving from a different state or starting a new job, they will need confirmation of your new job and income. They take several factors into consideration when reviewing an application, which include household income, rent-to-income and debt-to-income ratios, rental and housing history, employment history, criminal history, and FICO® scores. You will have a decision on your application within 1 to 3 business days of receiving all required information.
6) How much does it cost to participate in the Program?
There is a one-time Application Fee of $100 per household that must be paid online as part of the application process. This Application Fee covers all applicants in the household and is nonrefundable.
7) How do I find a home once I’m approved?
You will work with Jeff Anderson and The Anderson Team RE/MAX Results to search for homes that meet your purchasing criteria. Generally, this means that the home should be:
– Located in an approved community (home is displayed on in the website and is not adjacent to features that may negatively impair value);
– Listed for between $250,000 and $500,000 in most states, though exceptions apply;
– Located on a lot no more than three acres with a minimum of two bedrooms;
– A single family home or fee-simple townhome. Condo associations, condo interests, commercial and multi-family properties are not eligible for the Program and can’t be have HOA restrictions on renting. Only a traditional sale. Short sales, auctions, and REOs are not eligible for the Program;
– Free from material deficiencies, up to $2,500 can be added and some issues can be done per the inspection.
– No guest houses/ in-law suits with separate entrances;
– Please note home purchase homes with swimming pools or other water features are not approved.
Once you have selected a home, Jeff Anderson with RE/MAX Results will submit it to them online.
8) Is there a required deposit?
Yes. They require a deposit equal to two months’ rent. This deposit is not applied towards your rent. If you decide to leave the home at the end of any one-year lease term and you have been in compliance with the terms of the lease and return the home in the same condition it was in when you moved in (normal wear and tear excepted), the full deposit will be returned to you or credited to the purchase price if you buy the home. The full deposit (less any outstanding charges owed to the program) is also returned to you if you exercise your Right to Purchase the home.
9) How long does it take from when I select a home to when I move in?
On average, it takes five to six weeks from the time we enter into a purchase agreement for a home until the day you can move in. There are a number of variables that may affect the move-in timeframe, including the length of negotiation with the seller leading up to when we enter into a purchase agreement, what the home inspection reveals with respect to required repairs. You will kept informed throughout the entire purchase by Jeff Anderson RE/MAX Results.
10) Can I have pets in my home?
Up to three pets (cats or dogs) are allowed with a max weight limit of 180 pounds total. For dogs, you must not have a Doberman, Pitbull, Rottweiler or Mastiff. We do not allow for other animals such as pigs, horses, chickens, goats, etc. There is a $300 per pet fee. This fee is due with the required deposit and is refundable in the event you purchase the home. Otherwise, it is not refundable.
11) Are the monthly rent payments that I make applied to the purchase price of the home?
No. Monthly rent payments are not applied to the purchase price of the home. If you decide to exercise your Right to Purchase, you must pay the full predetermined price as set forth in the Right to Purchase Agreement.
12) How do I exercise my Right to Purchase?
You may notify them at any time that the Lease is in effect that you would like to exercise your Right to Purchase. However, you must provide notice in writing at least 60 days before you want to complete the purchase. Once you notified them that you want to exercise your Right to Purchase, they will contact you to get the process started.
13) Can I buy a home in the middle of a lease term, or do I have to wait until the end of the year?
You can exercise your Right to Purchase at any time during your Lease. However, you must provide a with written notice of your intent to exercise at least 60 days before you want the sale to close. In addition, the closing date must occur before the end of the applicable Lease term
For further information or to sit down and discuss this program with Jeff Anderson with RE/MAX Results at 612-386-8600.
If you want to make an application simply contact us and we will send you the invitation and links to get started.
I hope you found my blog on “Our pick a home, rent to own program” helpful. Look for more blogs on all aspects of Minnesota, real estate, and the world around us.
Just call, text, or email me with questions.
Jeff Anderson
The Anderson Team
www.mnrealestate.com
RE/MAX RESULTS
612-386-8600
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