Rent To Own Florida Mortage Lenders

WHO’S ELIGIBLE FOR RENT TO OWN
U.S. Citizens  And (NON) and Permanent Residents

WHAT TYPE OF HOME CAN I RENT TO OWN?

You can buy any Florida home listed for sale BY OWN OR MLS that is move-in ready with not much different maintenance. Rehab properties or NOT acceptable. Property types include: 

• Single-family – 
• Townhouse –
• Manufactured –  
• Multi-Family – 
• Villa – 
• Condo – Search Florida FHA Approved Condos – there are not many

RENT TO OWN FLORIDA FHA LOAN LIMITS

Since your end loan with most likely be an FHA mortgage so we have to ensure the purchase price is under the Florida FHA loan limits.
Some of the loan limits are listed below. To see all Florida FHA Rent To Own loan limits, click here. 

• MIAMI-FORT LAUDERDALE- HOLLYWOOD- PALM BEACH – POMPANO BEACH, FL $654,350
• ORLANDO-KISSIMMEE-SANFORD, PUNTA GORDA, ORMOND BEACH, GAINESVILLE $524,225
• PANAMA CITY–PALM BAY-MELBOURNE-LAKE CITY-TITUSVILLE-PUNTA GORDA-TALLAHASSEE, FL $524,225
• TAMPA-ST. PETERSBURG-CLEARWATER-PENSACOLA-FERRY PASS-BRENT, TALLAHASSEE, FL $524,225
• ARCADIA,PUNTA GORDA, DELTONA-DAYTONA BEACH-ORMOND BEACH, FL $524,225
• JACKSONVILLE, DUVAL-NASSAU-BAY  CLAY COUNTY, FL $580,750
• CRESTVIEW-FORT WALTON BEACH-DESTIN, FL $603,750
• NAPLES-MARCO ISLAND, FL $764,750
• KEY WEST, FL $967,150

3 OPTIONS AFTER YOU MOVE IN:

(1) Work with the Florida FHA mortgage lender to find someone to assume their obligations under the
FHA Rent To Own Agreement;

(2) Sell the home for profit or loss, and the customer receives all sales proceeds remaining after the Homebuyer Agreement is paid in full and sales costs are paid, or

(3) Abandon the property and cancel the agreement, placing the disposition of the home in the hands of the FHA mortgage lender. In this option, no costs paid by the customer are refundable.

KEYPOINT) To protect your rights, a memorandum of the agreement is filed with the Florida county records office, assuring the rights under the written agreements are protected as long as the regular monthly payments are made on
time.

RENT TO OWN STRUCTURE:

The basic structure of the Rent To Own FHA Mortgage Program is as follows for approved consumers (“Homebuyers”):
• A governmental Agency (“Agency”) — often an affiliate of a Native American Tribe — purchases a home (“Home”) using the Homebuyers’ purchase and sale agreement with a third-party seller.
• Originator lends funds to the Agency for the purchase of the Florida Home.
• The Agency enters into a ground lease financing agreement with Rent to Own Homebuyers to purchase the home and obtain a leasehold interest in the land (the “Rent To Own Agreement”). 
• In addition to making the payments required by the Rent To Own Agreement, Homebuyers must
occupy and maintain the Florida rent-to-own Home.
• The Rent To Own Aggreement has an option to purchase the Home (the “Purchase Option”) and otherwise is amortized and fully paid over 40 years, similar to a fully amortizing mortgage.

RENT TO OWN VS RENTING

1. The Rent To Own Agreement is a financing arrangement whereby the Agency will own fee simple title to the Home until the rent-to-home future home buyer exercises the Purchase Option or payment in full.
2. Homebuyers own the Home through a ground lease interest created by the Homeownership Agreement. A fee simple title is transferred to Homebuyers upon exercise of the Purchase Option or payment in full.
3. The Homebuyers will be required to sign a release of personal information so Originator can send that information to the Agency.
4. The Agency may obtain property insurance under a master policy, or the Homebuyers may select the insurance provider. Homebuyers are responsible for insurance costs, which will be part of the monthly payment.
5. The Homebuyers do not receive a Loan Estimate of charges from the Originator. If approved for the Program, Homebuyers will get a summary of the monthly payment obligations and closing charges for the agreement.
6. Homebuyers are restricted from leasing, subletting, or financing the Home, even for temporary uses.
7. Purchase or refinance requires payment of all applicable fees under the Rent-To-Own Agreement.
8. The Florida Homebuyers must have documented housing payment history.
9. Mandatory homeownership education courses may be required.
10. Delayed closing or occupancy may result in the voiding of any Agency commitment.

RENT TO OWN PRE-APPROVAL CHECKLIST

1. Full mortgage application. Top right click APPLY NOW.
2. Credit report – hard pull
3. Borrower’s Authorization *Signed/dated before credit report*
4. Letter of Explanation for all credit inquiries within 90 days of the credit report
5. Fee Sheet and Settlement Service Provider List *N/A if using Smart Fees*
6. Borrower Identification (including Social Security Card, ITIN documentation, Driver’s License, VISA, etc.)
7. Housing History documentation (12-month VOR/VOM, payment ledger/canceled checks, or credit
   supplement/credit report)
8. Asset documentation (2 months’ bank statements)
9. Gift Letter (signed/dated) and evidence of funds receipt
10. Purchase Contract/Escrow Instructions (including Assignment Addendum and Consumer Disclosure)
11. BANK STATEMENT ONLY FOR INCOME: months of recent bank statements
12. ASSETS AS INCOME- Asset Depletion: 2 months’ recent bank statements. Asset Liquidity: 2 months’ recent bank statements
13. FULL DOC- Wage Earner: YTD paystubs (60 days), W2, and WVOE Other: Per FHA requirements
    Self-Employed: Prior year tax returns, OR 12-month Third-Party Prepared P&L and 3 months bank statements, OR
    K1s and 1120s
14. DIVIDENDS AND INTEREST FOR INCOME-2 years’ tax returns with all schedules OR 2 years’ account statements with earned income documented
15. INDEPENDENT CONTRACTOR/1099 EMPLOYEE – Prior year tax returns, OR 3 months bank statements, OR pay stubs (if applicable)
16. INDIVIDUAL TAXPAYER IDENTIFICATION NUMBER (ITIN)- Prior year tax returns required if SSN listed on pay stubs, W-2, etc.
17. RENTAL INCOME- Other REO: Lease agreement(s), documented receipt of rental income, and 3 months’ reserves
18. DEPARTURE RESIDENCE – borrower owns current primary residence: Documentation to support request for DreamBuilder financing, Letter of Explanation from borrower (signed) regarding existing primary residence
    Fully executed lease agreement and proof of rental income receipt, OR copy of purchase contract showing current
    residence pending sale

ASSIGNMENT ADDENDUM TO PURCHASE & SALE AGREEMENT

When writing up the contract, you will also need the seller to sign the Assignment of Purchase and Sale Agreement. By signing below, Homebuyer assigns all of its rights and interests in the Homebuyer Earned Equity Agency.  Seller consents to such assignment by the Homebuyer with its signature on the line provided below. This Assignment shall be effective on the date accepted by the Rent ToOwn Lender as noted below. In addition to the assignment, the Homebuyer and Seller agree to the following additional terms: 1) To accommodate timing for document signing and recording, closing may occur within 3 business days of the agreed-upon closing date specified in the Agreement.
2) Any unused Seller-paid closing costs or concessions not used by shall be disbursed by escrow as directed by
an authorized representative of the designated Homebuyer and must comply with HUD requirements for the financing
as determined by the lender. 3) Homebuyer earnest monies on deposit shall be transferred into the name of the rent-to-own mortgage lender and applied to the loan and toward financing costs. 4) The home buyer must utilize financing through the rent-to-own program to purchase The Property, or this assignment is void. This contract is subject to the Homebuyer qualifying for and executing the long-term purchase agreement on this property. If there is a change in the Homebuyer’s circumstances and the Homebuyer no longer qualifies for the long-term purchase agreement or the Homebuyer refuses to execute the final long-term purchase agreement, the purchase contract and assignment addendum are void, and the maximum liability for  non-performance is forfeiture of
The earnest money.

RENT TO OWN APPROVAL CONDITIONS- Example

PTD (Before Rent To Own Closing Doc Conditions)
1. Rent To Own (T) – Utility – Provide Utilities and Condominium/PUD Project Questionnaire Contact Information form MUST be completed regardless if it’s in an HOA by the MLO or RE Agent
2. Rent To Own (T) – Identification – Provide SS card.
3. Rent To Own (T) – Home Warranty – Provide a home warranty covering all major systems (Roof, HVAC, Plumbing, electrical, appliances, siding, major fixtures, and flooring) for all properties when condition is C4 or C5 and/or for homes built before 1978.
4. Rent To Own (T) – EEP – Earned Equity Program complies with FHA guidelines related to property eligibility and the concentration of investment properties with FHA financing within a neighborhood radius. If the Mortgage will be
secured by an Investment Property (HUD considers EEP properties as investment transactions), including Mortgages
For governmental Entities, the Borrower may not have a financial interest, regardless of the ownership or financing type, in more than seven (7) dwelling units within a two-block radius. If the Borrower owns six or more units within a two-block radius, a map must be provided disclosing the locations of the units as evidence of compliance with FHA’s
seven (7) unit limitation.
5. Rent To Own (T) – Income – Please provide letter of explanation to explain how the  use of business funds will not hinder operations.
6. Rent To Own (T) – Gift Funds – When the applicant is receiving gift funds, they may not be used as reserves. Provide a fully executed gift letter, the donor’s bank statement evidencing sufficient funds to gift, a copy of the check or wire to the applicant’s account or directly to the title.
7. Rent To Own (T) – Credit – Pending SS verification.
8. Rent To Own (T) – Assets – Verified funds are $1XXXXX<XXX. The estimated funds needed to close are $XXK. Provide additional $EXAMPLEK in available funds.
9.Rent To Own(T) – Credit – Housing History – Please provide fully completed VOR form.
10. Rent To Own (E) – Purchase Agreement – Provide fully executed purchase contract and assignment addendum showing the Government Entity as the borrower.
11. Rent To Own (E) – PUD/Condo HOA – Please provide all PUD/CONDO HOA documentation,n including CC&Rs, By-laws, and additional documentation required to determine non-owner occupant interpretations and restrictions that may relate to the Rent To Own Program.
12. Rent To Own (E) – Property Inspection – Provide property inspection for all properties when the condition is C4 or C5 and/or for homes built before 1978. May be required on a case-by-case basis when conditions are C3. When property has a
septic tank, it must be pumped and inspected no more than 60 days before closing.
13. Rent To Own (E) – Title Docs/Tax Cert – Provide PrelimTitle Report, and Closing Protection Letter reflecting Government Entity as proposed insured. Prelim must include all schedules, and updated Tax Cert showing most recent 12 months proposed property taxes and/or the current MIL rate.
14. Rent To Own (E) – Termite/Pest Inspection – For all states that require a Termite/Wood Destroying Insect inspection; If identified by appraiser or inspector; and/or if reflected on the purchase contract and/or seller disclosure. Any/all infestations must be remedied before closing, and completion of work performed must be supported by documentation, including: invoices, description of work performed, and photos.
15. Rent To Own (E) – Credit Soft Pull – Need Credit Soft pull within 10 days of closing on each borrower
16. Appraisal – XML –  Appraisal XML file, most recent version, to the . Required to pull SSRs
17. Appraisal – Provide a satisfactory appraisal on form ______ w/copy of Appraiser’s current license & E&O Insurance, Paid Invoice, AIR Cert and Proof of Delivery. Must meet applicable program or agency guidelines.
18. DB (E) – Hazard Insurance – Provide evidence of hazard insurance with a deductible no greater than: a). 5% for
wind/hail; b). $5,000 for all other perils. Policy must contain coverage for personal liability, with minimum coverage equivalent to HO3 from an appropriately rated carrier and reflect: A) Homebuyer as primary or named insured; B)
Agency must be listed on the policy as additional insured; C) Mortgagee must be listed accordingly;D) RCE must be provided by the insurance company. For Florida properties, an agent letter can be provided in lieu of RCE attesting the dwelling coverage amount on the policy meets or exceeds the replacement cost estimate.
19. DB (E) – FHA Case Number Assignment – Provide successful FHA Case Assignment and clear CAIVRS in the
name of the Government Entity. Provide a tax EIN for the case assignment to be ordered.

 1st RENT TO OWN RENT PAYMENT

• The first contract/lease payment is due the month immediately following the closing of the purchase transaction. If a new month begins within seven (7) days of the month of closing, the first contract/lease payment will be collected at closing.