The Deed for Lease Program provides an option for qualifying homeowners who are facing foreclosure and are not eligible for modifications. The new program helps eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a stressful period, and helps to stabilize neighborhoods.
The program is designed for borrowers who don't qualify for or have not been able to sustain other loan-workout solutions, such as a modification. With Deed for Lease, borrowers transfer their property to the lender by completing a deed in lieu of foreclosure, and then lease back the house at a market rate.
To participate in the program, borrowers must live in the home as their primary residence and must be released from any junior liens on the property. Tenants of borrowers in this case may also be eligible for leases under the program. Borrowers or tenants interested in a lease must be able to document that the new market rental rate is no more than 31% of their gross income.
Leases under this new program may be up to 12 months, with the possibility of a term renewal or month-to-month extensions after that period. A Deed for Lease property that is subsequently sold includes an assignment of the lease to the buyer.
For more information about the Deed for Lease Program, including details on program eligibility, check out - www.efanniemae.com.
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