Home Partners provides responsible households a transparent path to home ownership through its Lease with a Right to Purchase Program. The program provides three to five years* of rent certainty with an initial financial commitment of just one year.
*In Texas, the maximum total lease term is 3 years.
Prospective residents start the process by filling out a Pre-Qualification Application that checks key issues.
If the Pre-Qualification Application is approved, the applicant will be required to submit a Full Application for a full credit and background check.
If a Full Application is approved, Home Partners will outline the maximum Monthly Rent of the home for which the prospective resident qualifies.
Prospective residents will work with a REALTOR® to find a home in an approved community. Once a home is identified and approved by Home Partners, Home Partners will attempt to purchase the home- the outcome of which will depend on certain conditions being met such as agreeing on a purchase price with the seller, a satisfactory inspection, attorney review of the purchase contract, and other closing conditions being satisfied.
Once Home Partners’ offer for the home is accepted by the seller, prospective residents will be required to sign a one year Lease for the home as well as a Right to Purchase Agreement.
In addition to signing these agreements, prospective residents will be required to provide a deposit that is generally equal to two months’ rent. The signed documents and deposit ( generally two months total) are typically due within 48 hours of Home Partners’ offer for the home being accepted by the seller and will be held in escrow pending the closing of the purchase of the home by Home Partners.Upon closing of the purchase of the home by Home Partners, the deposit will be released to Home Partners.
Rent for the first month is due within 72 hours of the closing of the purchase of the home by Home Partners (but no later than the resident’s move in date). This amount may be less than a full month’s rent if the resident moves in after the first of the month. Rent for the first month is pro-rated based on the resident’s move in date.
If the purchase of the home does not close and the prospective residents perform all their obligations to Home Partners, the deposit will be returned in full to the prospective resident. Prospective residents who fail to perform their obligations to Home Partners, such as by failing to provide the deposit and signed Lease and Right to Purchase Agreement after Home Partners into a purchase agreement for a home, will be disqualified from participating in the program in the future.
The purchase price in your Right to Purchase, as set at the time you enter into the lease, will include an adjustment equal to $2,500 (a “Maintenance Adjustment”). If you choose to purchase the home, and the maintenance costs covered by the Maintenance Adjustment actually incurred by Home Partners during the lease are less than the Maintenance Adjustment, the purchase price of the home at closing will be reduced by the unused amount of the Maintenance Adjustment.
The Maintenance Adjustment generally may be used to cover the cost of any repairs, renovations, replacements or improvements to the home that Home Partners determines are necessary or appropriate during your lease term.
Examples of the costs for which the Maintenance Adjustment may be used include the replacement of a major mechanical system (e.g., HVAC, furnace, roofing) or the repair of appliances, plumbing or fixtures. Home Partners generally is responsible for costs of home repairs in excess of the Maintenance Adjustment and those excess costs will not increase the purchase price for the home.
However, the Maintenance Adjustment does not limit your responsibility for any costs for which you would be responsible under the terms of the lease.
Examples of these costs are costs due to your misuse of the home, your willful or negligent conduct, or your failure to comply with the lease. Home Partners may require you to pay these other costs separately in accordance with the terms of your lease.
Your rent is not affected by the Maintenance Adjustment, and the Maintenance Adjustment does not affect you unless you purchase the home. For example, if Home Partners pays repair costs of $2,500 during the lease term that are covered by the Maintenance Adjustment, and you choose not to buy the home, you will not be required to reimburse Home Partners for those amounts.
The Lease and Right to Purchase Agreement will become effective once the purchase of the home is closed. 1 Anyone who is 18 years or older and will reside in the home must complete both the Pre-Qualification and the Full Application.
You will need funds to pay the Right to Purchase price if you exercise the Right to Purchase. Typically, you will need the amount of the down payment and you will need to obtain a mortgage loan from a third party. Among the key considerations that a prospective resident should consider include:
The value of the home may not increase above the price at which the resident has the Right to Purchase (i.e. the Right to Purchase Price may be higher than the value of the home).
The resident may not be able to exercise the Right to Purchase because he or she may not have the down payment or qualify for a mortgage loan from a third party.
Home Partners is not a mortgage company, does not have any obligation to provide or arrange a mortgage loan, and cannot guarantee that a resident will be able to obtain a mortgage loan.
If necessary and desired by a resident, Home Partners will assist the resident in entering a credit repair program to increase the likelihood of qualifying for a mortgage loan in the future. Home Partners cannot guarantee or in any way assure that such program will increase the likelihood that a resident will qualify for a mortgage loan or will obtain a mortgage loan in the future.
What is the Lease with a Right to Purchase Program?
Our Lease with a Right to Purchase Program (the “RTP Program”) allows you to find a home that you want to rent from us initially, but may also like to buy in the next three to five years. We believe that there are many households who may be thinking about buying a home but for whatever reason would like to rent at the current time. You can lease the home for up to three to five years, depending on the state, and you may purchase the home from us at any time at a predetermined price.
Who is eligible for the RTP Program?
We have certain minimum criteria for our program. Your household must have an annual income of $50,000. You must have stable employment. We cannot accept you into our program if you or anyone in your household has a history of eviction or a pending bankruptcy. Everyone in your household will be subject to a criminal background check.
How do I apply to the RTP Program?
Every member of your household who is 18 years of age or older must complete the Pre-Qualification Application and the Full Application. The Full Application requires certain information, including residence and employment history, for each member of the household. You also must provide income and asset verification for each member of the household whose income is to be considered in determining the rent approval amount in order for your application to be considered complete.If you are moving from a different state or starting a new job, we will need confirmation of your new job and income.
We take several factors into consideration when reviewing an application, which include household income, rent-to-income and debt-to-income ratios, rental and housing history, employment history, criminal history, and FICO® scores.
We will usually respond to you regarding your application within 1 to 2 business days of receiving all required information.
How much does it cost to participate in the RTP Program?
We have a one-time Application Fee of $75 per household that must be paid online as part of the application process. This Application Fee covers all applicants in the household and is nonrefundable.
Please note that in California, the Application Fee is $45 if there is only one applicant in the household and $75 if there are two or more applicants in the household.
Why might my application be denied?
We take several factors into consideration when reviewing an application, which include household income, rent-to-income, and debt-to-income ratio, rental and housing history, employment history, criminal history, and FICO® score. We consider the profile of the entire household when reviewing an application. If your application is denied, you will receive notification in writing.
How do I find a home once I’m approved?
You should work with your REALTOR® to search for homes that meet our purchasing criteria. Generally, this means that the home should be:
1. Located in an approved community (based on high schools and not adjacent to features that may negatively impair value);
2. Listed for between $100,000 and $550,000 in most states, though exceptions apply in California, Virginia and Washington;
3. Located on a lot no more than three acres with a minimum of two bedrooms;
4. A single family home or fee-simple townhome; condo associations, condo interests,
commercial and multi-family properties are not eligible for the RTP Program;
5. A traditional sale; short sales, auctions, and REOs are not eligible for the RTP Program; and;
6. No material deficiencies (e.g., major structural issues, pervasive mold, etc.);
Please note we only purchase homes with pools in certain states. At the current time, we purchase homes with pools only in the following states: California, Florida, Georgia, Oklahoma and Texas.
Once you have selected a home, the REALTOR® must submit it to us online.
Do you own the homes shown on your website?
No. The homes shown on our website are for sale in the markets in which we operate. This list of homes automatically feeds into our website from a listing service and is updated on a regular basis. However, we cannot filter for certain criteria such as whether a townhome is or is not fee-simple so there is a possibility that a home shown on our website does not meet our minimum eligibility criteria. The information on available homes is for informational purposes only and cannot be guaranteed by Home Partners.
My county is listed as approved on your website, but the high school of the home I want is not. Is the home approved?
We only consider homes that have default public high school attendance zone for public high schools ranked in the top 50% within each of our approved markets (based on standardized math and verbal test scores). A home must fall within the default attendance zone of an approved public high school, so although the lists on our website are sorted by county, we do not consider homes that do not meet this requirement.
Is there a required deposit?
Yes. Generally, we require a deposit equal to two months’ rent. This deposit is not applied towards your rent. If you decide to leave the home at the end of any one-year lease term and you have been in compliance with the terms of the lease and return the home in the same condition it was in when you moved in (normal wear and tear excepted), the full deposit will be returned to you or credited to the purchase price if you buy the home. The full deposit (less any outstanding charges owed to Home Partners) is also returned to you if you exercise your Right to Purchase the home.
How long does it take from when I select a home to when I move in?
On average, it takes approximately five to six weeks from the time we enter into a purchase agreement for a home until the day you are able to move in. There are a number of variables that may affect the move-in timeframe, including the length of negotiation with the seller leading up to when we enter into a purchase agreement, what the home inspection reveals with respect to required repairs, and the renovations you request. We will keep you informed throughout the entire purchase and renovation process so that you are aware of this timing.
What happens after I move in?
You are our tenant, and we are your landlord. You have entered into a lease with us for one year and are bound to the terms of that agreement. We will collect your monthly rent and perform any necessary repairs that are our responsibility after you move in.
Are the monthly rent payments that I make applied to the purchase price of the home?
No. Monthly rent payments are not applied to the purchase price of the home. If you decide to exercise your Right to Purchase, you must pay the full predetermined price as set forth in the Right to Purchase Agreement.
How do I exercise my Right to Purchase?
You may notify us at any time that the Lease is in effect that you would like to exercise your Right to Purchase. However, you must provide us with that notice in writing at least 60 days before you want to complete the purchase. Once you notify us that you want to exercise your Right to Purchase, we will contact you to get the process started.
Can I buy a home in the middle of a lease term or do I have to wait until the end of the year?
You can exercise your Right to Purchase at any time during your Lease. However, you must provide us with written notice of your intent to exercise at least 60 days before you want the sale to close. In addition, the closing date must occur before the end of the applicable Lease term.
Do you provide me with a mortgage?
We are not a mortgage company. We do not have any obligation to provide or arrange a mortgage loan. We cannot guarantee that you will be able to obtain a mortgage loan if and when you wish to exercise the Right to Purchase.
Can I have pets in my home?
We do allow up to three pets (cats or dogs) with a max weight limit of 180 pounds total. For dogs, you must not have a Doberman, Pitbull, Rottweiler or Mastiff. We do not allow for large animals (other than cats and dogs) such as pigs, horses, chickens, goats, etc.
The resident’s Right to Purchase Agreement (and therefore Right to Purchase) is in effect as long as the Lease is in effect, and the resident is in compliance with these two agreements.
The Right to Purchase Agreement gives the resident the right to purchase the home from Home Partners at a pre-defined price for each year of the Lease, as long as the resident is in compliance with the Lease and the Right to Purchase Agreements.
The maximum number of years a resident can rent the home and have the Right to Purchase is five years in most states and three years in Texas. The Right to Purchase does not obligate the resident to buy the home.
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Total Cost Basis:
Total Cost Basis is the price Home Partners pays for the home, closing costs,and make ready costs. Total Cost Basis is used to determine the resident’s Right to Purchase prices. A sample is highlighted below:
Purchase Price …………………………… $200,000
Closing Costs1 …………………………….$3,000
Make Ready ……………………………….$7,000
Total Cost Basis ………………………….$210,000
1 Includes costs such as transfer taxes, attorneys’ fees, title insurance, etc.
Monthly Rent Increases:
Each year, a resident’s Monthly Rent increases by no more than 3.75%.
For example, if the Monthly Rent for Year 1 is $1,400 per month, the increase for the next year is $50/month (i.e., $1,400 x 1.0375)*.
Year 1 ………$1,400
Year 2 ………$1,450
Year 3 ………$1,500
Year 4 ………$1,560 (Does not apply in Texas)
Year 5 ………$1,620 (Does not apply in Texas)
Right to Purchase Price Increases:
Each year, the Right to Purchase Price increases by 3-5% (depending on the region).
In the example, if the Total Cost Basis of the home is $210,000 and if the Right to Purchase increases by 5% (i.e., Prior Year Purchase Right Price x 1.05)* then the Purchase Right Price for Years 1-5 is as follows:
Year 1 ………………………………. $220,500
Year 2 ………………………………. $231,500
Year 3 ………………………………. $243,100
Year 4 ………………………………. $255,300 (Does not apply in Texas)
Year 5 ………………………………. $268,000 (Does not apply in Texas)
There are additional costs that the resident will incur if they exercise the Right to Purchase such as closing costs to purchase the home, including transfer taxes, attorneys’ fees, title insurance, and the cost of a mortgage loan. As a result, actual total costs to exercise the Right to Purchase will vary.
* Rent will round to the nearest $10. Right to Purchase Price will round to the nearest $100.
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