Rent Credits Toward Your New Home Purchase

Rent to own is a popular option these days, and they do work out well for some who are looking to buy a home in the future, but how does this work?




The rent credit is established when a renter takes on a lease agreement stating that a portion of this payment will go towards the down payment of the property. The lease agreement must clearly state and account for this being the case. There must be a clause within that agreement that states how much of the down payment will go toward the purchase of this home. In this case, it is the lender’s responsibility to show that the estimate is above FHA’s required fair market rent. If the amount is not above, then the amount will be deducted from the sale price of the home as seller concessions.



When buying a home, you will have your down payment to consider as well as your closing costs. To aid in limiting the amount of money that the seller needs to bring to closing, the realtor and seller can agree to pay all or most of the costs. Before finalizing anything, make sure that you understand what is required of you in terms of money, because you need to be financially prepared.