​Rent-to-Own Homes FAQ: A Simple Guide for Homebuyers

Rent-to-Own Homes FAQ: A Simple Guide for Homebuyers

Are you looking for a rent-to-own home but aren't quite ready for a traditional mortgage? A rent-to-own program may give you time to move into a home while you work toward becoming a homeowner.
This guide explains how rent-to-own works, who may qualify, credit score requirements, down payment requirements, and what to expect in simple terms.

What Is Rent-to-Own?Rent-to-own means you move into a home and rent it while preparing to buy the home later.

Instead of waiting until you are completely ready for a mortgage, this program is designed to give eligible buyers time to improve their financial profile and prepare for homeownership.
Simple idea: Move In Now. Buy Later.

How Does Rent-to-Own Work?The program has four basic steps:

1. Choose Your Home – Find a home that you want to purchase.
2. Move In Now – Move into the home under a lease.
3. Prepare to Buy – Work on your credit, savings, income documentation, and mortgage qualification.
4. Buy When Ready – Purchase the home once you meet the program requirements.

Who Is Rent-to-Own For?A rent-to-own program may be helpful for buyers who:

• Want to become homeowners
• Are first-time homebuyers
• Need more time to qualify for a mortgage
• Have limited credit history
• Are rebuilding their credit
• Do not currently have a credit score
• Need time to build savings
• Have alternative income (1099. Gig work) 
• Qualify using an ITIN or DACA

Can I Get a Rent-to-Own Home With Bad Credit?Minimum 580 FICO score, also buyers with no credit score may be eligible.

If your credit is not where you want it to be, the lease period can give you time to work on your credit and prepare for mortgage approval.

Can I Get Rent-to-Own With No Credit?Yes, buyers with no credit score may be eligible.

Your other financial information and program requirements will still need to be reviewed.

What Credit Score Do I Need for Rent-to-Own?580 FICO is the minimum credit score.

Buyers with no credit score may be eligible.

Can First-Time Homebuyers Use Rent-to-Own?Yes. The program is designed to include first-time homebuyers.
It can be an option for someone who wants to own a home but needs additional time to become mortgage-ready.

Can I Use an ITIN for Rent-to-Own?Yes. The program information says ITIN is accepted.

Can DACA Buyers Use Rent-to-Own?Yes. The program information says DACA is accepted.

Do I Need a W-2 to Qualify?Not necessarily.

Alternative income (1099, Gig work)  may be accepted, so not having traditional W-2 income does not automatically mean you cannot qualify.
Your income and documentation would need to be reviewed as part of the qualification process.

How Much Down Payment Do I Need?When you purchase the home, your actual amount will depend on the purchase price and your loan qualification.

Is Rent-to-Own the Same as Renting?No.
With traditional renting, you rent a home.
With a rent-to-own program, the goal is to rent while preparing to purchase the home.
You use the lease period to work toward becoming mortgage ready.

Is Rent-to-Own the Same as Buying a Home?Not at the beginning.
You first move into the home under a lease. When you meet the program requirements, you can move forward with purchasing the home.

Can I Build Equity With Rent-to-Own?The program information states that buyers build equity with every payment and can keep appreciation when they purchase the home.

What Does Home Appreciation Mean?Home appreciation simply means that a home's value increases over time.
For example, if a home is worth more in the future than it was when you started the process, that increase is called appreciation.


Can I Use Rent-to-Own to Buy an Investment Property?No.
The program information says it is for a primary residence.
That means the home is intended to be the home you live in, rather than a rental or investment property.

Can Landlords Use This Rent-to-Own Program?The program is not designed for landlords purchasing investment properties.
It is intended for buyers purchasing a primary residence.

What If I Have Been Turned Down for a Mortgage?If you have been turned down because you need more time to qualify, low credit score or DTI, this rent-to-own program will provide a path to work on your financial profile before purchasing.
The program specifically identifies buyers who need more time to qualify and buyers who are rebuilding credit as potential participants.

How Long Does Rent-to-Own Take?
The timing depends on when you meet the program requirements and are ready to purchase.

What Should I Do During the Rent-to-Own Period?Use the time to prepare for homeownership.
You may need to focus on:

• Building or improving credit
• Saving money
• Maintaining employment
• Organizing income documents
• Preparing for mortgage approval

What Type of Home Can I Buy?You can purchase any home as long as it is your primary residence.
The home also needs to meet FHA standards.

What Are the Benefits of Rent-to-Own?The program information highlights several features:

• Move into the home now
• Prepare to buy later
• Become a homeowner
• Time to work on credit
• Time to build savings
• Alternative income may be accepted
• ITIN/DACA may be accepted
• 580 FICO or no credit score may be eligible
• Build equity
• Keep appreciation when you purchase
  
  
  

Who Can Help Me With Rent-to-Own?Contact Wesley Howard 202-910-2281 to get started. 

Is Rent-to-Own Right for Me?Rent-to-own is designed for people who want to become homeowners but need more time to prepare.
If you are a renter, first-time buyer, have limited credit, are rebuilding your credit, or need time to strengthen your financial profile, it this is the program for you.
The first step is to contact Wesley Howard 

Ready to Explore Rent-to-Own?You dont need perfect credit to start exploring homeownership.

Move In Now. Buy Later.

Your lease renewal is coming up soon, contact Wesley Today to see if you can move from renter to homeowner.
​
Wesley Howard
Realtor 
202-910-2281
​