Home Buying in Philadelphia>Question Details

W.j. Dorsey, Home Buyer in Philadelphia, PA

Are there legit rent to own programs? My credit is 625 and I am looking to own a house in the northeast area 19141

Asked by W.j. Dorsey, Philadelphia, PA Sat Nov 30, 2013

Help the community by answering this question:


Rent To Own is a better deal for the Seller than it would ever be for a potential Buyer.

Key Points of Rent-To-Own:
• Portion of monthly rent payment is set aside by Landlord towards a future down payment
• Landlord/Seller locks you into a price today for a purchase tomorrow
• Forces the Tenant/Homebuyer to save towards down payment
• Tenant/Homebuyer still has to apply for a mortgage in the future to purchase the home

Rent-To-Own "forces" savings towards a down payment. Your Landlord deducts a pre-determined amount to hold in a special bank account, called an "escrow" account until you have saved up enough---through this "forced-savings" method---to meet a down payment to purchase the home.
At the end of the agreement, usually 2 to 3 years, you must apply for a mortgage loan to complete the purchase of the home. The terms of the purchase price, including the down payment amount, and the amount to be set aside from the rental for down payment, are all set down at the time of lease signing.

You can save for a down payment on your own.

If you are dedicated to the idea of buying a home, create a savings plan. When you have enough for a down payment YOU get to decide on the price you're willing to pay for a home based on market conditions.

With Rent To Own you're locked in to the house and to the price. What happens if three years from now your life situation has changed? Maybe you need a bigger/smaller home. Maybe your employment has relocated. Maybe your credit or income is insufficient to qualify for a mortgage loan.

Get Prequalified by a local Mortgage Banker. You may find you're qualified now for a mortgage loan.

Trevor Curran
NMLS #40140

*If you thought my answer was helpful, please give me a “Thumbs Up” or “Best Answer.” Thanks!
18 votes Thank Flag Link Mon Dec 2, 2013
hi if anyone is interested for rent to own a home? kindly send me a message?(209) 916-8361
Flag Mon Aug 22, 2016
Thank you. This was most helpful.
Flag Thu Jul 28, 2016
appreciate the info
Flag Fri Jul 22, 2016
I would like to say thank you too, that was good information you shared. 3 thumbs up from me!!
Flag Sat Jun 18, 2016
I was contacted by them and hadn't even finished reading about their program. Thank you
Flag Wed Nov 11, 2015
"You can save for a down payment on your own." I was seriously being talked into a rent to own property & you just saved me, I cannot thank you enough Trevor!
Flag Fri Nov 7, 2014
Pay attention to what I'm telling you, in 35 years as an active Realtor/Investor/Flipper etc I have never once met a single person who actually successfully and fairly rented to won. Not one, ever. Rent to own only comes in two flavors: 1- the seller cannot sell the property, they've tried for years and no one wants it for any number of reasons and so in their desperation they decide to offer it rent to own. 2- Sellers are extremely savvy and make money preying on less savvy buyers. These sellers never intend for you to own the home, their simply looking to take advantage of you.

Remember, "A Fool and His Money are soon Parted"

I absolutely understand your desire to own your own home, I believe it's a natural desire for the vast majority of people.

With a credit score of 625 you probably qualify for an FHA loan, though there's more to getting a loan than a credit score. (See link below)

Lastly look to join a Credit Union, there are still some out there that do offer 100% financing to qualified buyers and unlike those suggesting you call them to rent to won, your Credit Union isn't looking to take advantage of you.
6 votes Thank Flag Link Mon Dec 2, 2013
Well here i am to tell you that it does happen. my mother and father found a person willing to do a rent to own with a mobile home on half acre of land. They paid the person every month for twenty years. As soon as my parents made the final payment they turned over owner ship to them. we have been living here for 35 years now. I dont know if laws have changed or if they got lucky but you can find it because they did. orange park florida.
Flag Sun Aug 14, 2016
Thank you soooo much! You saved me!
Flag Mon Dec 14, 2015
Larry You are the best answer yet
Flag Mon Dec 2, 2013
I am a Realtor with Coldwell Banker in the Dallas/Fort Worth area. And it is true what some people say that traditional rent to own programs have been very spotty in their ability to actually help someone get to home ownership. However the game changer to this began about three years ago when a new program came onto the market. FOX News, The Wall St Journal and Chicago magazine as well as other media outlers have dedicated segments to this amazing opportunity. Under this program you are not picking from one or two houses that are owned by an investor. Instead you go out and pick from what is listed for sale by other Realtors. The home you pick is purchased by a partner of Coldwell Banker who then leases it to you. You get up to five years of guaranteed rents in writing up front before you even see the home.
You can buy the home at any point in time during the time you are leasing it. Meanwhile you get one person from Coldwell Banker Home loans to work with you and improve your credit score so you CAN buy that home the traditional way. Bottom line is you are dealing with the largest Real Estate firm in the world so you know that there are no hidden tricks, you are picking from what is listed for sale just like if you were buying it your self. And finally this process is honest and transparent otherwise it would not have been featured in a FOX News segment that complimented it. Call today as the program is now nation wide.
I am the #1 Coldwell Banker Realtor in America for this program and can refer you to a local Coldwell Banker expert in this program. 972-836-8880
2 votes Thank Flag Link Sun Apr 10, 2016
how do you get into a rent to own program me and my husband who are low income and have been working with a credit repair agency and have researched a way to get out of apartment living and get into a rent to own home in the area of where we live and have had continued issues of not getting any help and have spoken to several of the local real estate agencies in our area and continue to get told the rent to own programs are all scams and not to try so seems no one in my area is wanting to help us out of the awful negative home living situation me and my family are in what do i have to do to get someone in our area to help us our credit isn't real good but is bad enough to where no one is willing to help us and we are both medically disabled on disability and don't have a lot in income to change this situation everyone we have spoken to have treated us like we are some kind of walking disease .if you can help us id appreciate a reply thanks from Lincoln city Oregon
Flag Tue Jun 21, 2016
Hello Dorsey,

Whilst a 625 credit score does necessarily preclude you from buying a house at this time, the only way to know for sure is speaking with a mortgage lender whether it be myself or some of the others that have posted here. A five minute phone call will allow you to know all of the options. If you can't get approved maybe I can put you in touch with someone that does rent to own.

Alan Openshaw
Cornerstone Lending Inc
Southampton Pa 18966
215 953 0800
cell 267 992 7276
NMLS ID 143960
2 votes Thank Flag Link Mon Dec 2, 2013
My credit score is low and I can't get a mortgage. I am currently working with a lawyer to improve my score. I need to move ASAP. Is rent to own a possible solution for me?
Flag Wed Nov 11, 2015
I am looking for a rent to own, I cannot get a loan for 2 years still and we really need to move into a home. can you recommend a rent to own company or suggest where i can look. I live in washington(battleground, we need to stay there since my daughter is disabled and her program after high school is there) ANY HELP WOULD BE APPRECIATED.
Flag Mon May 4, 2015
rent to own does not exist in Philly, there are only 2 types of people in the world. those who rent and those who Own. Work on your credit and buy a house in an area that you want to live in. Peace and love. MichaelCohen@remax.net 6106420347
1 vote Thank Flag Link Sun Dec 1, 2013
If you enter into a rent to own situation without making sure that you can do what you need to in order to qualify for a loan in the allotted time, you could be wasting a lot of money to rent to own vs a regular rental situation.

If you talk to a qualified mortgage broker, and have a plan to get qualified in 6-18 months, and want to get into a property today, then a rent to own would be good option.

If you go into it blindly and find out that you have something that will prevent you from qualifying, then you will be wasting a lot of money to have the option to purchase when you don't have the ability to do so.

Some landlords use the rent to own option to get a large up front non-refundable deposit knowing that there is no way you will be able to purchase, and hope that you default so that they can do it again.

Others actually set you up to succeed and purchase the house.

The other thing... Ask the landlord to provide some type of proof that the loans on the home are current and that they are paid monthly... Last thing you want to do is find out that you are not quite ready to buy and the house is in foreclosure.

Stephen Chatto
Good Vibes Real Estate Solutions
1 vote Thank Flag Link Sun Dec 1, 2013
Very good response. I especially like the way you phrased the following:
"you will be wasting a lot of money to have the option to purchase when you don't have the ability to do so". So true! Good advice! So many consumers asking about rent/option arrangement really have no idea what it is involved, and I fear that some owners will take advantage of them, and the fact that they are desperate to buy a home.
Flag Sun Dec 1, 2013
If a down payment is also a problem, you can qualify for a USDA loan. I know you there are down payment assistant programs. Just keep researching, and don't give up. The one thing I did learn in buying my home is that it's a really hard process, even when you get pre approved, it's far from over. Don't be afraid to not take no as an answer, and do a lot of research. I never thought I would make it to closing day, and here I am in my new home. The mortgage company wants to see that you take it serious, and that it's important to you. This was my dream home, and I was tired of hearing that I was going to have to wait. I had found the house I wanted, and I was going to fight for it. I have great job, and I knew that nobody was going to take owning the house I wanted more serious than me. If you get approved, make sure you don't apply for any new credit, and you pay all bills on time, until you close on the home. Dont change jobs either. Don't give up. I'm living proof that you don't need a perfect credit score to buy a home.
0 votes Thank Flag Link Sat May 28, 2016
You can get a FHA loan If your credit score isn't perfect. I just recently closed on my house, and I didn't have a perfect credit score. I To get approved for a home at NLC, you need a score of 580. They also helped me get my score higher with a rapid rescore, because I paid off all my credit cards. You don't want to close them. You just want to pay them at least below the 30%. I got a 30 year fixed at a 4.3% interest, and I paid 3.5% down. I worked really hard on getting my score higher, and I was doing everything by the book. It was moving very slow. I really blessed to find them. The rent to own program with Coldwell bank sounds really neat. I didn't know about that, or I would have checked in on it, but if you'd rather go ahead and purchase your home, I would give NLC Loans a call. I always like to have more than one option. I think they will do a conventional loan with 10% down with a score of 620. NLC isn't the only mortgage company that offers this, so you may want to shop around.
0 votes Thank Flag Link Sat May 28, 2016
where do I start with rent to own with trulia or Zillow, community pillar.

Thank You
0 votes Thank Flag Link Tue Apr 12, 2016
I am selling my house in the northeast. 3 bedrooms wall to wall carpet. newly remodeled. If you have a good steady job and good income. contact me and I can find you a mortgage company to buy my house.
0 votes Thank Flag Link Thu Mar 24, 2016
0 votes Thank Flag Link Sat Mar 12, 2016
Call me. I am a Realtor with Coldwell Banker. I am also the #1
Coldwell Banker Realtor in America for a program that lets do exactly what you want. The program was featured on FOX News, Bloomberg new and the Wall St Journal. It is now buying homes in 35 metro areas in America and Philadelphia is one of them! 972-836-8880 I can refer you to a local Coldwell Banker Realtor that is an expert in this new program.
Flag Sun Apr 10, 2016
I have a very good job but terrible credit score.....i was thinking of finding a rent to own property because 1) i can't get a mortgage because of my credit 2) don't have money for down payment....problem is i really want my own home..i have three kids and two dogs...so it's very difficult to find a house to rent......i've been researching as much as i can on this subject....the question i have is how much of a down payment would i have to give initially to start renting/own the property...
0 votes Thank Flag Link Mon Aug 17, 2015
i live in Suffolk County NY not Philadelphia PA.....
Flag Mon Aug 17, 2015
I just want to make a point: not one person actually answered your question; and every person that replied is a real estate agent (which means they make money by selling houses) and if you go rent-to-own route not one of them will make any money because you are not using a real estate agent in the process.
0 votes Thank Flag Link Mon Jun 16, 2014
You know, people pursuing rent to own homes can't qualify for a traditional mortgage, so we wouldn't be making money off of them anyway. I've been a consumer advocate for the homebuyer for 20 years...I can tell you that the vast, vast majority of Realtors are honest, ethical people who wouldn't give bad advice so they could potentially make a buck or two.

If you insist on going the rent-to-own route, consider yourself forewarned. There's only a slim chance that it'll work out the way it is promised. But suit yourself.
Flag Tue Jun 17, 2014
Hi Dorsey,

You may have the option to do rent to own, however, I would strongly suggest that you avoid it at all costs. Most of the time, Rent to Own contracts do NOT work out. It is better to rent and then buy on 2 separate occasions than at one time. On that note, you may qualify for a PHFA loan through my in-house lender of Waterstone Mortgage; based on your credit score of 625. You do have to qualify income wise for this type of mortgage. Most banks want you to have a credit score at 640 or better, so the PHFA loan may be a possible option.

If you have any questions or if you need assistance in looking for a home in your desired area, feel free to contact me at 267-918-6322 or email me at victoria@themackgroup.org.
0 votes Thank Flag Link Sun Dec 1, 2013
Hi Dorsey,

You have some good information provided by the professionals below.

WIth a FICO score of 625, you may be able to qualify for an FHA mortgage now.
Some mortgage brokers can work with scores of 620+ to get you pre-approved.
Have you tried to get approved for a purchase yet?

Please feel free to contact me if you would like assistance in finding a home. I can also refer you to a mortgage broker who may be able to help you get approved to purchase now. If not, then he can help you develop a plan to follow to become approved in the near future.

Have a great Holiday Season. I look forward to hearing from you.

All the best,
Larry Lichtman, Realtor
Your Real Estate Resource For Life
Cell (267) 254-7994

Liberty Real Estate Associates
924 Arch Street
Philadelphia, PA 19107
0 votes Thank Flag Link Sun Dec 1, 2013
Yes. There are many legitimate rent-to-own programs.

Here's a link to a blog I wrote on how to find them: http://bit.ly/findaleaseoption

Although I'm a big fan of rent-to-own programs, some of the detractors here make legitimate points. For instance, if you can afford to buy now, you should buy. And if it only means waiting a few months to clean up your credit or save up a down payment, then wait. Your selection also is much more limited. And the truth is that perhaps half or more of the tenant-buyers in rent-to-own programs never end up buying. It's not because the program is a scam. Rather, sometimes their needs change. Or they decide they don't like the house. Or they haven't succeeded in cleaning up their credit.

So: Understand the drawbacks as well as the benefits.

Hope that helps.
0 votes Thank Flag Link Sun Dec 1, 2013
where can I find bank owned rent to own or does it not exist
Flag Sat Feb 20, 2016
I am not sure if I want to own another home. I was considering the rent to own option, my current home is a money pit if I had this option of renting to own, I definitely wouldn't want to own it, I was wondering will this program be for me.
Flag Sun Sep 27, 2015
Don Tepper, Real Estate Pro in Burke, VA
Steve gave a very thorough response.........great advice!

The other part of this is.....just to repeat what I said below - you will have a VERY LIMITED selection of homes from which to choose..........Do you really want to make the biggest purchase of your life, and have very few options.....and have to settle, perhaps, on a home you don't love, or even particularly like ??

I do have 1 question for you, if you could take the time to reply....I'd appreciate it.
I am curious what your impression of "rent to own" is - what does it mean to you?

I think, and maybe I am wrong, that many consumers think they simply pay rent, and IF they decide to buy the home at the end of the lease, (they then negotiate the price) and ALL of their rent is applied to the home as a down payment. If they don't, or can't, buy the home, they simply walk away.

Is this what you think/thought.................. or were you aware that you could stand to lose a lot of money if you do not buy the home for any reason??

0 votes Thank Flag Link Sun Dec 1, 2013
There sure are, if the tenant follows the guidelines and the market increases, also the contract is very important also.
0 votes Thank Flag Link Sun Dec 1, 2013
"if"?..........."and the market increases"?.....rent/option arrangements offer, imo, too much risk for someone whose financial picture already has problems! Would you really advise a client who cannot qualify for a loan now, or has little money, to try for a rent/option, and risk losing their option money?
Flag Sun Dec 1, 2013
Hello Dorsey,

Rent to own programs can be risky for both parties. The contract that you sign will dictate who carries the major burden of risk. I have seen them done successfully and there are also people out there who are putting all the risk on the tenant/prospective buyer.
I have people that I work with who buy houses specifically for resale or rent to own. They are in the business of turning a profit. That does not automatically mean that you are getting ripped off. I suggest doing some research and when you are ready to pull the trigger contact an attorney to review the proposed contract.

Alan Openshaw
Cornerstone Lending Inc
Southampton Pa 18966
215 953 0800
cell 267 992 7276
NMLS ID 143960
0 votes Thank Flag Link Sun Dec 1, 2013

What is it about "rent-to-own" that you feel appeals to you?

What is keeping you from just making a purchase through traditional means?

Joshua Stein, ABR®, e-Pro®
Coldwell Banker Preferred – Conshohocken

Office: (610) 828-9558 * Cell: (215) 866-8030
Direct: (484) 270-1165 * Fax: (215) 999-5894
Email: jstein@cbpref.com
Web: http://www.joshuasteinhomes.com
Blog: http://jsteinhomes.wordpress.com/

PA License #RS317975
0 votes Thank Flag Link Sun Dec 1, 2013
Dorsey, what's keeping you from buying a home in the traditional manner?

No down payment?

Be careful of rent with the option to buy agreements as they generally favor the owners..........and......
You will have a VERY limited selection to choose from, as most sellers who want to, and can, sell now, not later.

Also, you will be expected to give an upfront "option" fee (down payment, if you buy the home - or, you LOSE it if you do not buy the home for any reason).

You may also be asked to pay rent over and above the normal rent.
Only that overage , not all your rent, will be applied to the purchase....or you will forfeit that as well, if you do not "exercise your option" and buy the home for ANY reason.
So, if you do not qualify for a loan.................you lose all that money.

You also want to make sure the owner is not in any financial distress, and pays their mortgage on time!

Make sure you fully understand what it is you're asking for!

My advice is - rent until you can buy in the usual way.

Best wishes.......
0 votes Thank Flag Link Sat Nov 30, 2013
Sure; there are some legit rent-to-own options out there, but a 625 credit score should qualify you for an FHA mortgage if you'd like to buy straightaway. There are also a number of great down payment assistance programs out there as well, if you'd like to save up a bit before going forward. I blogged about a few of those programs here a few weeks ago if you'd like to have a look: http://www.trulia.com/blog/kimberlywingfield/2013/11/making_…

If you're looking to get into some of these programs, now is a great time to verify eligibility/get your applications in! Many/most of these down payment assistance, etc. options only have a certain number of spaces open per calendar year, so it's best to throw your hat in the ring as early as possible if they seem like something you'd be interested in.

If you have any other questions, feel free to contact me any time; good luck in your search!


Kim Wingfield

Keller Williams - Center City Realty
Ofc: 215-627-3500
Cell: 267-5300-5641
Email: kimberly.wingfield@gmail.com
0 votes Thank Flag Link Sat Nov 30, 2013
Er, cell is 267-530-5641. Apologies for the sticky fingers!
Flag Sat Nov 30, 2013
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