There are a few good companies and individuals out there who offer houses on rent to own, land contract, lease option programs. These types of programs are known as "contract for deed". In other words, you are signing a contract and when the contract has been fulfilled (paid) you get the deed to the house, but the house belongs to someone else until the contract is fulfilled.
With the land installment contract, you actually purchase a small part of the property with each payment, with the lease option and lease purchase (rent to own) you don't get any ownership of the property till the end of the term, provided of course that you have fulfilled the contract.
Each of these types of contract is actually a form of owner provided finance so you can buy the house. Usually the buyer/lessee/vendee (you in this example) pay a down payment or option consideration (the name of the "up front money" depends on the type of contract) of usually several thousand dollars or whatever amount is agreed and payments throughout the term of the deal.
Here is what you need to watch out for: not only do you need to fulfill the contact, but the seller needs to as well.
Now what does that mean? Well, remember how you have to fulfill your end of the deal by making all the contract payments for the house? The seller has a committment under the contract as well.
The seller needs to give you title to the property once the terms of the contract have been met on your end.
This is where the problem arises sometimes.
What if the seller (vendor, lessor) has liens on their property which he hasn't told you about? Or what if the seller has received a foreclosure notice because he hasn't paid HIS mortgage, then you come along and give him some thousands of dollars on his promise to turn the property over to you a number of years down the road....but the bank forecloses before that time. Or worse, what if you pay off the contract between you and the seller, and the seller never made the last 6 months of payments to his mortgage, the property transfers to you and THEN the lender forecloses?
Please understand that I'm not a lawyer and none of this should be construed or misconstrued as legal advise, but what I'm trying to point out is that there ARE some serious pitfalls you can find yourself wrapped up in if you are not careful!
And for goodness sake, don't ever sign a contract through the mail and mail the seller a check! (like the craigslist scams we hear about!)
Having said that, here are the basic steps to help you stay out of trouble:
1) use an attorney
2) have a title search done by a reputable title company
3) have the attorney or title company do the closing
4) make sure the contract you sign is recorded at the courthouse immediately after closing
5) use an attorney (I said that twice because it's that important)
Now if I haven't scared you from buying a home on some contract for sale, again, there are some companies and individuals out there who are reputable had have shown themselves to be reliable and I know from personal experience that contracts for deed can and do work.
Good luck in your search, just be careful!