Cleveland Real Estate News

This means you would sign your title over to your lender and you would become their tenant.  The catch is Fair Market Value (FMV) for the rent. If it’s determined to be $850/month, and your mortgage is more than that, it won’t work. If  the FMV is less than what you are now paying per month for your mortgage, it might work.

According to the FHA guidelines, they will lease it to you for a year (during which time you would hopefully become more financially solvent). At the end of the year they have the option of continuing the lease (up to them and how timely your rental payments have been over the 12 month period).  From Market Watch: “….The bower has to document  that the new market rental rate doesn’t exceed 31% of his or her gross income….”

I read the Fannie Mae press release on this and also some of the documentation. You can find all the original forms and details on this Fannie page.

The way I read this, it doesn’t seem to be a program to help you keep your home.  There is nothing in the documentation that says after a year of leasing they will turn it back over to you.  It sounds like a way, however, to keep you from having to find other housing while still foreclosing on your home.

I still have questions over and above the one I just outlined. If the tenant cannot reclaim the home automatically, does Fannie Mae have the right (or intention) to list the home for sale during a person’s tenancy? 

I do agree that this could help with neighborhood stabilization.  And I will check on details as I can ferret them out.  I think they just rolled this program out at the end of this week.  Peace Out – 3C