My father always says - "The reason why you are where you are today, is because of the choices and decisions you made yesterday - life is choice driven."  

Hearing this bothered me, because  I was reminded of the mountain of debt my wife and I had accumulated over the years. It seemed like we would never get free from the bondage of debt. 

My fathers statement, though harsh, is right.  After seeking the advice of a mortgage lender in 2000, my wife and I tightened up on our spending and aggressively reduced our debt.  We were able to get our debt to income (DTI) ratio to a point where the lender was willing to loan us money on our first home at a decent interest rate in 2002. 

Life is choice driven but sometimes we all go through a tough time, doing our best to make ends meet.   Fortunately there are several programs to help people that have been through difficult times but have  gained some traction and stability over the last 12 months. 

Program 1:  Home Partners Lease Right to Purchase Program (HPLRPP)

If you answer yes to all the following questions, there is strong possibility you would get approved for this program.

  • Do you have a minimum credit score of 550? 
  • Do you have a combined household income of $50K/year? 
  • Have you had steady employment over the last 12 months? 
  • Have you consistently paid your bills on time over the last 12 months?
  • Do you have 2 month reserves (example, if your rent was $1,300 a month, do you have $2,600 in savings)

The HPLRPP allows the potential home owner to look for homes for sale on the MLS.  Once they find a home they like, a cash offer can made on the home via  Home Partners.

Example of how the program works:

Jacob has a credit score of 600 and Julie has a score of 550, gross household income of $70K and steady jobs.  Home Partners approves them for $250,000.   Jacob and Julie use their realtor and find a home they love, listed at $176K.  Estimated rent is $1,370. After the inspection, Jacob and Julie request the carpet in one of the bedrooms be replaced because it's worn.  Home Partners agrees to replacing the carpet and makes an offer that is accepted at $176K.   Julie and Jacob deposit 2 months rent (refundable security deposit) in the amount of $2,740.  45 days later, the home closes, Julie and Jacob pay first months rent and move in.  

After year 1, Julie and Jacob make significant progress on their debt and scores increased enough to secure a loan from their lender.  They request to purchase the home from the investor. and the investor sales the home to Julie/Jacob for the list price $176K + 4% ($7K) = $183K.  The home appraises for $187K.    The lender allows Julie/Jacob to use their security deposit as part of the down payment.  Julie/Jacob close and now are official homeowners.

Program 2:  FHA Choice

If you answer yes to all of the following questions, there is a possibility you would be approved for this program.

  • Do you have a credit score between 500 and 619? 
  • Have you had steady employment over the last 12 months?
  • Have you paid your bills, including rent, on time over the last 12 months? 
  • Do you have 2 months reserves? 
  • Can you put 3.5% down?   

Example of how the program works:

Let's say Jacob and Julie in the above scenario used Home Partners because they did not have enough to put down on a home.  After being in their home for a year, they were able to save $10K while also paying off some debt to improve their debt to income ratio.  They also attend a HUD-approved homeowner workshop over the weekend.  These actions help them qualify for the FHA Choice program and use this program to purchase the home they are renting from Home Partners.  



If you think you qualify for any of these programs, give us a call at 615-890-8053 or 615-893-1130

Ask for The Results Team: