Home Purchase Program FAQ

Home Purchase Program

Questions & Answers

Overview

What is the ResiAmerica Home Purchase Program?

The ResiAmerica Home Purchase Program offers a distinctive path to homeownership, bypassing traditional mortgage hurdles. We purchase your chosen home and lease it to you with an option to buy at today's price anytime in the next 15 years. Your purchase price is locked in at today's price no matter how much the market goes up.

Each month, part of your rent is applied towards the purchase price, ensuring your payments are an investment in your future. And if you decide not to proceed with the purchase, this money is refunded to you.

This program empowers you with immediate control over your home, offering the flexibility to renovate, repair, or even sell the property during the lease period.

How does the program work? Please explain from application to closing.

Our program is designed with simplicity in mind:

Get approved based on stable income and a deposit - minimum 10% deposit
Choose any home on the market. You can use your own agent or we can help you shop.
We buy the home for you and then give you an exclusive legal right (called an "option") to buy the home from us for today's fixed price at any time during the next 15 years.
During this time, rent the home from us.
Before you move in, you'll pay a deposit of at least 10% of the home's price. This deposit locks in your purchase price and is applied toward the purchase if you decide to buy the home.
A portion of your monthly rent goes towards the home's purchase price.
You can then make extra payments toward the home to buy it in full as quickly as possible. If you change your mind and decide not to pay, any extra payments you made are 100% refundable to you.
Enjoy full control—renovate, repair, or we will help sell the home, with you getting any proceeds above the purchase price, during the lease term.

Who is a good fit for the program?

Our program is designed for individuals and families who have a stable income and can provide a down payment of at least 10% of the purchase price. It's particularly suited for those who might find traditional mortgage routes challenging, such as business owners, freelancers, recent immigrants, or anyone with a unique credit history. We believe in making homeownership possible for those who are ready and willing to invest in their future, regardless of their past credit challenges.

Here are some examples of people who might be a good fit for our program:

Recent immigrant with no social security number or ITIN
Business owner with inconsistent income
Commission based jobs with variable income
Plenty of assets but temporarily short on income

Is the program more expensive than if I bought a home with a bank mortgage?

Yes, and No. When you compare our program to buying a home with a mortgage, the costs might look a bit different. Our program is really for people who might have trouble getting a regular loan from a bank. Yes, our monthly rent might be a bit higher. This is because we offer special benefits, like making sure the price of the home won’t go up for 15 years. This means even if houses get more expensive, yours won’t. Your rent also stays pretty much the same, except for some small changes if property taxes or insurance costs go up. Think of it this way: even though you pay a little more each month, you get to live in your home right away without waiting to qualify for a bank loan. Plus, you can buy the house at the price we agree on now, not a higher price later. And you can make the house your own, fixing it up or even selling it if you want to. For many people, the chance to move into a home now and the promise of a stable price are worth the extra cost. It's a way to start owning a home when other options might not be available.

Program Specifics

How is the purchase price of the home determined, and does it change over time?

The price we agree on for the home is set when we buy it. It includes what we paid for the house, plus a fee of 5% for the transaction, and the costs of closing the deal. Once this price is set, it won’t change, even if house prices in the area go up.

What percentage of my monthly rent goes towards the purchase price?

Our program isn't exactly like a mortgage, but we’ve designed it to feel similar. At the beginning, a small part of your rent—what we call a "rent credit"—goes toward owning the home. As time goes on, this amount gets bigger. If you decide not to buy the house, we give this rent credit back to you.

Can I buy the home before the 15-year lease ends, and how?

Yes, you can buy the home any time you want. You can pay us bit by bit in refundable payments that we keep safe until you’re ready to buy. Or, you can get a mortgage loan to pay off the price we agreed on.

What happens if I decide not to buy the home at the end of the lease?

If you choose not to buy, we’ll give back any rent credit or extra payments you made. But, the 10% deposit you paid at the start to lock in your purchase price won’t be returned. Also, please remember that it is possible for you to sell the home during your lease term since you have an exclusive option to buy the home.

This works like this: We will list the home for sale for any price you specify. If/when it sells, we will then receive our agreed on purchase price at closing and you will receive any proceeds, net of closing costs. This makes our program much more unique than other lease option programs.

How does the process work if I want to sell the home before I paid for it in full?

If you decide to sell the house, we can help. You can pick any real estate agent you like, or use our services at ResiAmerica for a lower fee. We’ll handle the paperwork and help you sell the house. At the end, the buyer pays the money to the title company, which then pays us any amount you still owe, and you get the rest, minus any closing costs.

Eligibility and Application

What are the requirements to be eligible for your home purchase program?

To qualify for our home purchase program, applicants need to provide a down payment of at least 10% and demonstrate the ability to afford the monthly payments. This financial readiness can be shown through a combination of savings and/or consistent income. Importantly, our program is inclusive; we do not require applicants to have a Social Security number, ITIN, or US permanent residency, making it accessible to a wider range of aspiring homeowners.

Is there a credit score minimum or other financial criteria for the application?

We do not set a minimum credit score for our program. Instead, we conduct our own evaluation to ensure that applicants are a good match for our program, focusing on their savings and income levels. This assessment is tailored to understand the financial situation of each applicant, whether they earn a regular wage or are self-employed, to ensure they can successfully participate in the program.

Can I apply if I am self-employed or have a non-traditional income source?

Absolutely. Our program is designed with flexibility in mind, specifically to accommodate individuals who may face difficulties securing a traditional bank loan. This includes self-employed individuals and those with non-traditional income sources. We recognize the value and potential of every applicant, regardless of how they earn their income.

What documents do I need to provide during the application process?

During the application process, you'll be asked to provide documentation that verifies your financial stability. This includes bank statements and proof of income, such as pay stubs, tax returns, or other relevant financial documents. Additionally, a government-issued ID, like a driver's license or passport, is required to confirm your identity. These documents help us create a comprehensive understanding of your financial background, ensuring that our program is a good fit for your homeownership journey.

Property Selection and Management

Are there any restrictions on the type or location of homes I can select?

Our program primarily focuses on standard homes in suburban areas that blend well with their surroundings. While we do consider homes in rural areas on a case-by-case basis, these may necessitate a larger down payment. We do not finance mobile homes or properties within communities that impose rental or age restrictions.

How do we ensure that the home is in good condition when we start the process?

Prior to purchase, we conduct a thorough home inspection to ensure the property's condition meets our standards. You'll have the opportunity to review the inspection results with us, and we can negotiate with the seller for any necessary repairs or a credit for repairs, much like a traditional home buying process.

What are my responsibilities regarding property maintenance and repairs?

As the lessee, you're responsible for all routine maintenance and repairs on the property. However, if a significant structural issue, not identified during the initial inspection, arises, we will provide support to address it. Day-to-day upkeep, nonetheless, falls under your responsibility.

Can I remodel the house or make significant alterations to the home?

Absolutely. While we'd like to be informed about the changes and review any significant improvements, we're open to you personalizing the home through renovations or additions. Your enhancements are encouraged as long as they align with our guidelines and enhance the property's value.

Financial Considerations

Is there a penalty for terminating the lease early?

No, there is no penalty for early termination. However, please be aware that you will lose your purchase deposit. However, we will refund your rent credits or any extra payments you made if you terminate your lease early.

Are there any additional fees or costs associated with your program?

Beyond the home's purchase price, a 5% transaction fee is added to the final purchase price, not required upfront. You're also responsible for all closing costs, including title company and attorney fees. After the initial purchase, there are no ongoing fees except for your monthly rent, part of which contributes to a "rent credit" towards eventual homeownership.

How is the monthly rent calculated, and what portion goes towards the purchase price?

Your rent is slightly higher than a traditional bank mortgage, factoring in taxes and insurance. This accounts for the higher risk since our clients might not qualify for bank loans. Our model includes a rent credit system, starting small and increasing over time, designed to simulate the experience of paying down a mortgage. If you opt not to buy, this rent credit is refunded.

Will the monthly rent ever change over time? What if market rents rise?

The program is set up with three year lease terms. At the end of each lease term, you can walk away and receive any rent credits back. Upon the renewal for the next three years, there will be a 5% rent increase. This is much less than a regular lease which increases 3-5% PER YEAR on average. Also, the rent will increase if property taxes or insurance rates go up. It will increase by the amount that the property taxes and insurance increase only.

What happens to the option fee if I decide to purchase the home?

The option fee will be applied toward the purchase price if you decide to purchase the home.

What happens if I miss a rent payment or face financial difficulties during the lease?

We will try to work with you as best as we can, but we will handle missed payments just like we would with a regular tenant. If the rent is not paid, we will have no choice but to file an eviction. However, any rent credit or additional payments made toward the purchase price will be refunded if you're evicted or cancel the lease.

What happens at the end of the 15-year lease? Will my rent credit be enough to cover the purchase price?

At the end of the 15-year lease, you will have paid a lot of money into your rent credit account. But if you did not make extra payments, you will not have enough to purchase the home in full. Most people make extra payments every month. Remember, that even if you completely change your mind, these payments are refundable to you.

So you will haver three options at the end of the lease term:

Get a standard mortgage loan to pay us the purchase price and title will be transferred to you.
Pay us the balance in full out of your savings.
Allow us to sell the home and you will receive the difference between the sales price and the balance to purchase.

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Need help?

ResiAmerica advisors are available by text/phone and chat everyday from 8am-6pm.

800-626-7079
contact@resiamerica.com