100% Equity Lease option Programs! Are they legal?

By
Mortgage and Lending with Liberty One Lending

This 100% equity program allows people who want to buy to enter into an option agreement to purchase the property anytime within 12 months if they choose.

The buyer pays rent each month all of which gets deposited in an escrow account on their behalf; rent accumulates as equity towards a maximum (per the lease-option agreement) 5% down payment.

I have spoken with several real estate attorneys and lending institutions and they have all confirmed that if the money is deposited directly from the buyer into escrow on the buyers behalf, then it is not considered a seller contribution.

However, I always recommend full disclosure when you speak with your bank prior to entering into any purcahse agreement. Show your lender the option agreement, contract and provide full disclosure ahead of time.

I really like the program and I expect to see more and more of this type of seller cooperation with buyers to close real estate transactions in today's challenging real estate and financing market.

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