Financing Rent-To-Own Deals

Rent-to-own seems like such a win-win. 

In these rent-to-own deals, the seller already has a buyer.  And best of all, since they’re already the tenant in the property, they have a vested interest in maintaining and even improving the property.  The buyer can even make up some of the down-payment using a portion of the amount that they’re paying for rent.

What could possibly go wrong? 

Unfortunately, the reality is less rosy.  After several years of paying into a Rent-To-Own, many tenants find that a lot of lenders don’t like financing these deals when the time comes for the tenant to take over the title.

Borrowers are often left confused.  If they have good income, a nice property, and some equity built up, why won’t lenders lend?

Honestly, that’s a question we ask too.  

But for us at Kokanee Mortgage, we know rent to own deals actually present an opportunity.

Over the course of 40 years in business, we’ve developed programs for this kind of deal.  And here’s the kicker – usually all these borrowers need is a lender to help them pay out the Rent-To-Own agreement.  Once that’s completed, they can get the title of the property out of the previous owner’s name and into theirs. From there, it’s generally simple enough that they can get funding from a conventional lender and pay us out.

For us, what we need to see is that the borrowers, the property, and the LTV fit our regular refinance guidelines.  Then, the fact that it’s a rent-to-own is not a problem for us.

When you do find borrowers in need of a rent-to own solution, contact the experienced underwriters at Kokanee Mortgage.  With over 40 years in the lending industry, we have the expertise to be able to handle tough deals for all kinds of borrowers.