Fannie Mae said on last Thursday it would allow eligible homeowners to rent back their own homes. Called The Deed for Lease Program, it lets homeowners transfer the deed back to their lender and then sign a lease to remain in the home. It is an effort by Fannie Mae to help those who do not qualify for or cannot sustain a loan modification. Borrowers must live in the home as their primary residence and there cannot be any subordinate liens when the property is transfered to them.
The program aims to reduce the number of foreclosed properties being abandoned because they often fall into disrepair and hurt the surrounding homes' values. It also keeps a roof over troubled borrowers' heads and an income stream coming from the property. Tenants of homeowners may also be eligible for leases.
"This new program helps eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities," said Jay Ryan, vice president of Fannie Mae.
Homeowners must show they can afford market rent, but that payment cannot be more than 31% of the borrower's pre-tax income. Leases may be up to 12 months, with the possibility of renewal or month-to-month extensions. If the property is sold, the new owner picks up the lease.
Copy and paste in the menue bar the enclosed link: https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2009/0933.pdf gives you a more detail overview of the program. If you need help understanding it, please call me at 845-896-5760.