How would this work?

[bakergrl]

There is a company here that builds new communities. They have an offer where you buy their home and they will lease your old one for up to 6 years until it sells. We are almost a year out from our bankruptcy closing, with a ride through on first and second mortgage.

If we apply for a home loan with this deal are the banks going to deny us because we are basically going to have 2 loans and it gives us an option to dump house 1 at some point? I doubt we can get approved so soon out but just wondering how lenders view something like this.

[HHM]

The BK is going to prevent you from getting a mortgage for 2 years from discharge anyway.

My guess is the builder probably requires you to use their designated lenders that have already signed off on this program. But again, even with FHA mortgage, you are looking at 2 years before you can get a mortgage.

But, interesting concept.

[bakergrl]

Thanks for the reply. This company has been doing this for years, what about 2 years into the DC, do you think lenders would consider doing it since the home will be leased out and we are not defaulting on the loan?

[AngelinaCatHub]

Thanks for the reply. This company has been doing this for years, what about 2 years into the DC, do you think lenders would consider doing it since the home will be leased out and we are not defaulting on the loan?

As HHM stated "interesting concept". But, what happens if you are off the hook for six months, on the hook for this new house, and the other house does not sell? Well I reread, and see you have not reaffirmed. Hmmmmm "interesting concept". 'Hub

[bakergrl]

It is up to 6 years. I guess if it was not sold by then you are stuck with 2 mortgages or you could walk away from house 1 if some how allowed and not part of the deal for house 2. I was hoping that the lease would pay some of the balance owed to sell it or maybe a short sale. I just do not know if any lender would approve someone 2 years out of bankruptcy for basically a motgage for a 2nd home.

As HHM stated "interesting concept". But, what happens if you are off the hook for six months, on the hook for this new house, and the other house does not sell? Well I reread, and see you have not reaffirmed. Hmmmmm "interesting concept". 'Hub

[HHM]

It is up to 6 years. I guess if it was not sold by then you are stuck with 2 mortgages or you could walk away from house 1 if some how allowed and not part of the deal for house 2. I was hoping that the lease would pay some of the balance owed to sell it or maybe a short sale. I just do not know if any lender would approve someone 2 years out of bankruptcy for basically a motgage for a 2nd home.

Probably not. But again, this sounds like a builder specific program and therefore they probably have lenders ready to do it. The BK complicates matters, and I am guessing the requirements are fairly stringent regarding the house to be rented. If the house is way upside down or if the house would be significantly cash flow negative, you would probably be denied. Also, I bet that you actually sign the house over to the builder...so, I doubt it is that they simply lease it "for you", you probably sell the house to them in some sort of lease option contract.