Lease-to-Own & Own-to-Lease

[Community Development Banking List]

Original message from: bush.phillip@gmail.com

Hello,

I am looking for information about two community development finance tools,
Lease-to-Own ( or Lease-to-Purchase) home mortgage products and Own-to-Lease
arrangements. Any information about where either of the two have been used
in the past as well as information about organizations that are involved
with them currently would be of interest to me.

For LO, I have found that Fannie Mae had a product that wasn't being used,
and Self Help Credit Union has/is revamping it currently. I also found that
Cleveland Housing Network has a LO program based on LIHTC. Other than those
two leads I haven't come across much. I'd really like to find an
organization that has run a LO program with a 1-5 year lease period in the
past or is running one currently. The lessons they learned about how to deal
with the problem incumbent to LO mortgages would be valuable to Enterprise
as it begins to support REO programs using LO mortgages as a disposition
tool.

For OL, I am trying to find organizations that have set up programs that
assist homeowners who are facing foreclosure or unaffordable mortgage
payments and enabled the homeowner to stay in their home while making lower
rent payments in place of mortgage payments. This might involve a nonprofit
buying the mortgage note on a property, a workout with the mortgage
note-holder, or another approach. The "We Buy Homes" people seem to operate
programs along these lines, but I doubt they benefit the former homeowner.
However, I'd still be interested in information on how their approach works
if anyone has such information

Thank you for the assistance.


Phillip Bush


Freddie Mac Fellow
Enterprise Community Partners
10227 Wincopin Circle
Columbia, MD 21044
Office: 410-772-2754
Cell: 704-806-3559
pbush@enterprisecommunity.org

[Community Development Banking List]

Original message from: sgraham@ucrc.biz

Utah Housing Corporation created in 1993 an NCSHA award winning CROWN
lease-to-own program using tax credits. You can reach the current
program manager Susan Van Arsdell at svanarsdell@uthc.org.



The Federal Home Loan Bank had a LTO product in the 1990's. Nonprofits
could obtain mortgage loans that were assumable by the tenant. The
program hurdle was the cash reserve or Nonprofit net worth requirement.
I do not know if they resolved that issue.









Steven Graham, President

Utah Community Reinvestment Corporation

475 East 200 South, Suite 120

Salt Lake City, Utah 84111

801-366-0400

sgraham@ucrc.biz <mailto:mlea@ucrc.biz>



The information contained in this transmission is considered to be
confidential and is intended for use by the recipient only. If received
in error, please destroy and notify sender. Sender does not intend to
waive confidentiality or privilege. Use of this email is prohibited
when received in error.All information contained herein shall not be
understood, assumed, or considered to be an offer to fund, loan, grant,
or otherwise affirm an offer of the same, on behalf of the Utah
Community Reinvestment Corporation, it's staff and/or officers, unless
expressly stated.







From: bounce-2895131-8333158@list.cornell.edu
[mailto:bounce-2895131-8333158@list.cornell.edu] On Behalf Of Phillip
Bush
Sent: Monday, July 28, 2008 1:06 PM
To: communitydevelopmentbanking-l digest recipients
Subject: Lease-to-Own & Own-to-Lease



Hello,

I am looking for information about two community development finance
tools, Lease-to-Own ( or Lease-to-Purchase) home mortgage products and
Own-to-Lease arrangements. Any information about where either of the two
have been used in the past as well as information about organizations
that are involved with them currently would be of interest to me.

For LO, I have found that Fannie Mae had a product that wasn't being
used, and Self Help Credit Union has/is revamping it currently. I also
found that Cleveland Housing Network has a LO program based on LIHTC.
Other than those two leads I haven't come across much. I'd really like
to find an organization that has run a LO program with a 1-5 year lease
period in the past or is running one currently. The lessons they learned
about how to deal with the problem incumbent to LO mortgages would be
valuable to Enterprise as it begins to support REO programs using LO
mortgages as a disposition tool.

For OL, I am trying to find organizations that have set up programs that
assist homeowners who are facing foreclosure or unaffordable mortgage
payments and enabled the homeowner to stay in their home while making
lower rent payments in place of mortgage payments. This might involve a
nonprofit buying the mortgage note on a property, a workout with the
mortgage note-holder, or another approach. The "We Buy Homes" people
seem to operate programs along these lines, but I doubt they benefit the
former homeowner. However, I'd still be interested in information on how
their approach works if anyone has such information

Thank you for the assistance.



Phillip Bush





Freddie Mac Fellow

Enterprise Community Partners

10227 Wincopin Circle

Columbia, MD 21044

Office: 410-772-2754

Cell: 704-806-3559

pbush@enterprisecommunity.org

[Community Development Banking List]

Original message from: kentrpipes@aol.com

I tried three different Lease-to-Own properties in the 90's and had very bad experience with them all. I will never do another one.

One alternative I would try is a sale with a escrowed Deed in Lieu of Foreclosure. In NJ law, a landlord/tenant relationship exists with every tenancy=20where pure ownership and Landlord / Tenant law is decidedly in favor of the=20tenant until the final control is handed over to the landlord. Passing title and holding a mortgage allows the buyer to take advantage of all the purchaser's tax deductions and benefits of ownership, including applying the $7,500 of tax credit for first time homebuyers eligible under the recently passed Housing Stimulus bill. BUT, the seller/alternative to landlord is protected from the costs and trouble of foreclosure, which in NJ is a 1 year process at a minimum, by giving an attorney a Deed to be held in escrow that can be filed if any of the conditions in the contract are nor met. This protect=20all parties when marginal buyers are granted ownership prior to the time they could qualify for ownership with a standard mortgage meeting all the lender's underwriting criteria.

I also want to develop a shared appreciation mortgage (SAM), where in investor puts up the 20% necessary to qualify a buyer for a mortgage without mortgage insurance. During the first 5 years the buyer pays for all the costs and assumes all the expenses of ownership, including paying a reasonable interest rate to the investor for the use of the 20% down payment. The investor=20gets 50% of the increased value of the property during the first five years, when the occupant owner with the other 50% has the right to buy the investor out through a refinance, after the credit and income issues are resolved and an appreciation of the property's value allows them to have enough equity to get conventional financing.

The SAM could be coupled with an Employer's Assisted Home Ownership and/or Mortgage program. This would benefit lots of people.

Anyone interested in helping make this idea work?


In a message dated 07/29/08 18:28:30 Eastern Daylight Time, sgraham@ucrc.biz writes:

=20
=20
Utah Housing Corporation created in 1993 an NCSHA award winning CROWN lease-to-own program using tax credits. You can reach the current program manager Susan Van Arsdell at svanarsdell@uthc.org.
=20
The Federal Home Loan Bank had a LTO product in the 1990=E2=80=99s. Nonprofits could obtain mortgage loans that were assumable by the tenant. The program hurdle was the cash reserve or Nonprofit net worth requirement. I do not know if they resolved that issue.
=20
=20
=20

Steven Graham, President
Utah Community Reinvestment Corporation
475 East 200 South, Suite 120
Salt Lake City, Utah 84111
801-366-0400
sgraham@ucrc.biz
=20
The information contained in this transmission is considered to be confidential and is intended for use by the recipient only. If received in error, please destroy and notify sender. Sender does not intend to waive confidentiality or privilege. Use of this email is prohibited when received in error.All information contained herein shall not be understood, assumed, or considered to be an offer to fund, loan, grant, or otherwise affirm an offer of the same, on behalf of the Utah Community Reinvestment Corporation, it's staff and/or officers, unless expressly stated.
=20
=20
=20
From: bounce-2895131-8333158@list.cornell.edu [mailto:bounce-2895131-8333158@list.cornell.edu] On Behalf Of Phillip Bush
Sent: Monday, July 28, 2008 1:06 PM
To: communitydevelopmentbanking-l digest recipients
Subject: Lease-to-Own & Own-to-Lease
=20
Hello,
I am looking for information about two community development finance tools,=20Lease-to-Own ( or Lease-to-Purchase) home mortgage products and Own-to-Lease arrangements. Any information about where either of the two have been used=20in the past as well as information about organizations that are involved with them currently would be of interest to me.=20
For LO, I have found that Fannie Mae had a product that wasn't being used, and Self Help Credit Union has/is revamping it currently. I also found that Cleveland Housing Network has a LO program based on LIHTC. Other than those two leads I haven't come across much. I'd really like to find an organization that has run a LO program with a 1-5 year lease period in the past or is running one currently. The lessons they learned about how to deal with the problem incumbent to LO mortgages would be valuable to Enterprise as it begins=20to support REO programs using LO mortgages as a disposition tool.=20
For OL, I am trying to find organizations that have set up programs that assist homeowners who are facing foreclosure or unaffordable mortgage payments=20and enabled the homeowner to stay in their home while making lower rent payments in place of mortgage payments. This might involve a nonprofit buying the mortgage note on a property, a workout with the mortgage note-holder, or another approach. The "We Buy Homes" people seem to operate programs along these lines, but I doubt they benefit the former homeowner. However, I'd still be interested in information on how their approach works if anyone has such information
Thank you for the assistance.
=20
Phillip Bush
=20
=20
Freddie Mac Fellow
Enterprise Community Partners=20
10227 Wincopin Circle
Columbia, MD 21044
Office: 410-772-2754
Cell: 704-806-3559
pbush@enterprisecommunity.org



Kent R. Pipes, President / CEO
The Affordable Homes Group, Inc.
PO Box 249 (96 Rancocas Rd.)
Mt. Holly, NJ 08060
(609) 261-4571 or cell (609) 784-4027

www.affordablehomesgroup.com=20

[Community Development Banking List]

Original message from: jim@wpfsi.com

Steve



I am interested in discussing this issue further. We are just beginning to
research these types of products and their feasibility. I can be reached
here or at 215-452-0100.



Jim Burnett

Executive Director

West Philadelphia Financial Services Institution



_____

From: bounce-2899258-8116586@list.cornell.edu
[mailto:bounce-2899258-8116586@list.cornell.edu] On Behalf Of KentRPipes
Sent: Tuesday, July 29, 2008 10:13 PM
To: Steve Graham; Phillip Bush; communitydevelopmentbanking-l digest
recipients
Subject: Re: Alternative to "Lease-to-Own"



I tried three different Lease-to-Own properties in the 90's and had very bad
experience with them all. I will never do another one.



One alternative I would try is a sale with a escrowed Deed in Lieu of
Foreclosure. In NJ law, a landlord/tenant relationship exists with every
tenancy where pure ownership and Landlord / Tenant law is decidedly in favor
of the tenant until the final control is handed over to the landlord.
Passing title and holding a mortgage allows the buyer to take advantage of
all the purchaser's tax deductions and benefits of ownership, including
applying the $7,500 of tax credit for first time homebuyers eligible under
the recently passed Housing Stimulus bill. BUT, the seller/alternative to
landlord is protected from the costs and trouble of foreclosure, which in NJ
is a 1 year process at a minimum, by giving an attorney a Deed to be held in
escrow that can be filed if any of the conditions in the contract are nor
met. This protect all parties when marginal buyers are granted ownership
prior to the time they could qualify for ownership with a standard mortgage
meeting all the lender's underwriting criteria.



I also want to develop a shared appreciation mortgage (SAM), where in
investor puts up the 20% necessary to qualify a buyer for a mortgage without
mortgage insurance. During the first 5 years the buyer pays for all the
costs and assumes all the expenses of ownership, including paying a
reasonable interest rate to the investor for the use of the 20% down
payment. The investor gets 50% of the increased value of the property
during the first five years, when the occupant owner with the other 50% has
the right to buy the investor out through a refinance, after the credit and
income issues are resolved and an appreciation of the property's value
allows them to have enough equity to get conventional financing.



The SAM could be coupled with an Employer's Assisted Home Ownership and/or
Mortgage program. This would benefit lots of people.



Anyone interested in helping make this idea work?





In a message dated 07/29/08 18:28:30 Eastern Daylight Time, sgraham@ucrc.biz
writes:

Utah Housing Corporation created in 1993 an NCSHA award winning CROWN
lease-to-own program using tax credits. You can reach the current program
manager Susan Van Arsdell at svanarsdell@uthc.org.



The Federal Home Loan Bank had a LTO product in the 1990's. Nonprofits
could obtain mortgage loans that were assumable by the tenant. The program
hurdle was the cash reserve or Nonprofit net worth requirement. I do not
know if they resolved that issue.







LOGO-New

Steven Graham, President

Utah Community Reinvestment Corporation

475 East 200 South, Suite 120

Salt Lake City, Utah 84111

801-366-0400

sgraham@ucrc.biz <mailto:mlea@ucrc.biz>



The information contained in this transmission is considered to be
confidential and is intended for use by the recipient only. If received in
error, please destroy and notify sender. Sender does not intend to waive
confidentiality or privilege. Use of this email is prohibited when received
in error.All information contained herein shall not be understood, assumed,
or considered to be an offer to fund, loan, grant, or otherwise affirm an
offer of the same, on behalf of the Utah Community Reinvestment Corporation,
it's staff and/or officers, unless expressly stated.







From: bounce-2895131-8333158@list.cornell.edu
[mailto:bounce-2895131-8333158@list.cornell.edu] On Behalf Of Phillip Bush
Sent: Monday, July 28, 2008 1:06 PM
To: communitydevelopmentbanking-l digest recipients
Subject: Lease-to-Own & Own-to-Lease



Hello,

I am looking for information about two community development finance tools,
Lease-to-Own ( or Lease-to-Purchase) home mortgage products and Own-to-Lease
arrangements. Any information about where either of the two have been used
in the past as well as information about organizations that are involved
with them currently would be of interest to me.

For LO, I have found that Fannie Mae had a product that wasn't being used,
and Self Help Credit Union has/is revamping it currently. I also found that
Cleveland Housing Network has a LO program based on LIHTC. Other than those
two leads I haven't come across much. I'd really like to find an
organization that has run a LO program with a 1-5 year lease period in the
past or is running one currently. The lessons they learned about how to deal
with the problem incumbent to LO mortgages would be valuable to Enterprise
as it begins to support REO programs using LO mortgages as a disposition
tool.

For OL, I am trying to find organizations that have set up programs that
assist homeowners who are facing foreclosure or unaffordable mortgage
payments and enabled the homeowner to stay in their home while making lower
rent payments in place of mortgage payments. This might involve a nonprofit
buying the mortgage note on a property, a workout with the mortgage
note-holder, or another approach. The "We Buy Homes" people seem to operate
programs along these lines, but I doubt they benefit the former homeowner.
However, I'd still be interested in information on how their approach works
if anyone has such information

Thank you for the assistance.



Phillip Bush





Freddie Mac Fellow

Enterprise Community Partners

10227 Wincopin Circle

Columbia, MD 21044

Office: 410-772-2754

Cell: 704-806-3559

pbush@enterprisecommunity.org






Kent R. Pipes, President / CEO

The Affordable Homes Group, Inc.

PO Box 249 (96 Rancocas Rd.)

Mt. Holly, NJ 08060

(609) 261-4571 or cell (609) 784-4027



www.affordablehomesgroup.com <http://www.affordablehomesgroup.com/> ('http://www.affordablehomesgroup.com/>')

_____

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[Community Development Banking List]

Original message from: edeshields@communityempower.com

We are a private community development firm currently offering a Lease-to-Own solution nationally. We are an investment grade, Moodys reviewed program for LO loans and an issuer of LO loans in the secondary markets. We purchase REO properties and LO them to our customers, or OL to distressed borrowers within non-performing mortgage portfolios. We are one of the largest provider of consumer credit information in the U.S. and the maker of the consumer credit score, CE Score.



We also been the Administrator for tax-exempt LO programs backed by CitiMortgage and FreddieMac. We are known nationally in the market place under our Community Empower trademark where we provide consumer housing and credit education to approximately 20,000 consumers monthly.



We are very knowledgeable on the LTO subject and would be glad to help you in anyway we can.



Ed DeShields

President

HYCA Financial Services, LP

Community Empower

Dallas, TX

214-722-5800

edeshields@communityempower.com

-----Original Message-----
From: bounce-2907179-8630709@list.cornell.edu on behalf of Jim Burnett
Sent: Wed 7/30/2008 1:37 PM
To: 'KentRPipes'; 'Steve Graham'; 'Phillip Bush'; 'communitydevelopmentbanking-l digest recipients'
Cc:
Subject: RE: Alternative to "Lease-to-Own"



Steve



I am interested in discussing this issue further. We are just beginning to research these types of products and their feasibility. I can be reached here or at 215-452-0100.



Jim Burnett

Executive Director

West Philadelphia Financial Services Institution




_____


From: bounce-2899258-8116586@list.cornell.edu [mailto:bounce-2899258-8116586@list.cornell.edu] On Behalf Of KentRPipes
Sent: Tuesday, July 29, 2008 10:13 PM
To: Steve Graham; Phillip Bush; communitydevelopmentbanking-l digest recipients
Subject: Re: Alternative to "Lease-to-Own"



I tried three different Lease-to-Own properties in the 90's and had very bad experience with them all. I will never do another one.



One alternative I would try is a sale with a escrowed Deed in Lieu of Foreclosure. In NJ law, a landlord/tenant relationship exists with every tenancy where pure ownership and Landlord / Tenant law is decidedly in favor of the tenant until the final control is handed over to the landlord. Passing title and holding a mortgage allows the buyer to take advantage of all the purchaser's tax deductions and benefits of ownership, including applying the $7,500 of tax credit for first time homebuyers eligible under the recently passed Housing Stimulus bill. BUT, the seller/alternative to landlord is protected from the costs and trouble of foreclosure, which in NJ is a 1 year process at a minimum, by giving an attorney a Deed to be held in escrow that can be filed if any of the conditions in the contract are nor met. This protect all parties when marginal buyers are granted ownership prior to the time they could qualify for ownership with a standard mortgage meeting all the lender's underwriting criteria.



I also want to develop a shared appreciation mortgage (SAM), where in investor puts up the 20% necessary to qualify a buyer for a mortgage without mortgage insurance. During the first 5 years the buyer pays for all the costs and assumes all the expenses of ownership, including paying a reasonable interest rate to the investor for the use of the 20% down payment. The investor gets 50% of the increased value of the property during the first five years, when the occupant owner with the other 50% has the right to buy the investor out through a refinance, after the credit and income issues are resolved and an appreciation of the property's value allows them to have enough equity to get conventional financing.



The SAM could be coupled with an Employer's Assisted Home Ownership and/or Mortgage program. This would benefit lots of people.



Anyone interested in helping make this idea work?





In a message dated 07/29/08 18:28:30 Eastern Daylight Time, sgraham@ucrc.biz writes:

Utah Housing Corporation created in 1993 an NCSHA award winning CROWN lease-to-own program using tax credits. You can reach the current program manager Susan Van Arsdell at svanarsdell@uthc.org.



The Federal Home Loan Bank had a LTO product in the 1990’s. Nonprofits could obtain mortgage loans that were assumable by the tenant. The program hurdle was the cash reserve or Nonprofit net worth requirement. I do not know if they resolved that issue.









Steven Graham, President

Utah Community Reinvestment Corporation

475 East 200 South, Suite 120

Salt Lake City, Utah 84111

801-366-0400

sgraham@ucrc.biz <mailto:mlea@ucrc.biz>



The information contained in this transmission is considered to be confidential and is intended for use by the recipient only. If received in error, please destroy and notify sender. Sender does not intend to waive confidentiality or privilege. Use of this email is prohibited when received in error.All information contained herein shall not be understood, assumed, or considered to be an offer to fund, loan, grant, or otherwise affirm an offer of the same, on behalf of the Utah Community Reinvestment Corporation, it's staff and/or officers, unless expressly stated.







From: bounce-2895131-8333158@list.cornell.edu [mailto:bounce-2895131-8333158@list.cornell.edu] On Behalf Of Phillip Bush
Sent: Monday, July 28, 2008 1:06 PM
To: communitydevelopmentbanking-l digest recipients
Subject: Lease-to-Own & Own-to-Lease



Hello,

I am looking for information about two community development finance tools, Lease-to-Own ( or Lease-to-Purchase) home mortgage products and Own-to-Lease arrangements. Any information about where either of the two have been used in the past as well as information about organizations that are involved with them currently would be of interest to me.

For LO, I have found that Fannie Mae had a product that wasn't being used, and Self Help Credit Union has/is revamping it currently. I also found that Cleveland Housing Network has a LO program based on LIHTC. Other than those two leads I haven't come across much. I'd really like to find an organization that has run a LO program with a 1-5 year lease period in the past or is running one currently. The lessons they learned about how to deal with the problem incumbent to LO mortgages would be valuable to Enterprise as it begins to support REO programs using LO mortgages as a disposition tool.

For OL, I am trying to find organizations that have set up programs that assist homeowners who are facing foreclosure or unaffordable mortgage payments and enabled the homeowner to stay in their home while making lower rent payments in place of mortgage payments. This might involve a nonprofit buying the mortgage note on a property, a workout with the mortgage note-holder, or another approach. The "We Buy Homes" people seem to operate programs along these lines, but I doubt they benefit the former homeowner. However, I'd still be interested in information on how their approach works if anyone has such information

Thank you for the assistance.



Phillip Bush





Freddie Mac Fellow

Enterprise Community Partners

10227 Wincopin Circle

Columbia, MD 21044

Office: 410-772-2754

Cell: 704-806-3559

pbush@enterprisecommunity.org






Kent R. Pipes, President / CEO

The Affordable Homes Group, Inc.

PO Box 249 (96 Rancocas Rd.)

Mt. Holly, NJ 08060

(609) 261-4571 or cell (609) 784-4027



www.affordablehomesgroup.com <http://www.affordablehomesgroup.com/> ('http://www.affordablehomesgroup.com/>')


_____


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