HOMEOWNERSHIP is a dream for millions of Americans, but it might seem out of reach if you’re living paycheck to paycheck.
A North Carolina woman’s dream came true after some financial advice from a homeownership program.
Heather Torres, 35, had been renting in Greensboro for years.
She wanted to buy a house, but a low credit score, combined with high rent, didn’t allow her to save enough for a down payment.
A determined, single mother of two children aged 4 and 13, Heather tried to house hunt but came across estate agents who weren’t helping her understand what she needed to do to become a homeowner.
It was then that she met Landis.
Heather, now a first-time homeowner, told The Sun: ‘I heard about Landis from the estate agent I worked with.
“She suggested I contact Landis after I couldn’t get pre-approved on my own due to a high debt-to-income ratio.”
It was a life changing decision – Heather was on a new path to home ownership.
How the rent-to-own program works
Heather began working with Landis’ financial experts with the goal of becoming a landlord.
She was able to get the financial advice she needed, but the process didn’t happen overnight.
Heather, who works in the legal sector, had to see if she qualified for their program by filling out an online application.
Once she was accepted into the program, financial experts worked with Heather to budget for what she could afford.
Then it was time to look for a house.
With a budget provided by Landis, Heather was able to go out and choose the house she wanted to buy.
Landis stepped in, made an offer, and bought the house for Heather.
While Landis declined to split the cost of Heather’s ownership, the homes Landis’ clients buy range from $110,000 to $400,000.
Landis handles all assessments, inspections and paperwork.
How much is it costing you?
Landis now owned the house that Heather wanted to buy.
Meanwhile, Heather has rented it out with the agreement to eventually buy Landis’ house.
Landis charges its customers market rental prices based on the value of the home.
To give you an idea of how much it will cost you, Landis provides a “house calculator” that will display figures for the rent you will pay, followed by your mortgage payment when you complete the program.
The Home Calculator lets you choose which area you want to live in, provided Landis invests in that area.
Then you can enter the cost of the house, the amount you will deposit, followed by the length of time you wish to rent.
For example, if you choose to buy a $300,000 home in Indianapolis, Indiana, you will receive a recommended down payment.
In this case, $9,000 was suggested.
The company allows people to rent for up to 24 months.
Here is the payout breakdown based on Indianapolis ownership:
Landis program (24 months)
- Rent: $2,125
- Down payment savings: $301
- Total per month: $2,426
Mortgage cost after the program:
- As low as $1,750
- Save up to $375 per month with Landis
During the rental period, Landis financial experts will work with participants to improve their credit and save more money.
Tom Petit, co-founder and co-CEO of Landis, told The Sun: “The heart of Landis is actually not the rental program. It’s an important part of it.
“The core is the coaching we give people. It’s about financial coaching, financial empowerment.”
Landis sets aside a portion of the client’s monthly payment in an installment savings account.
This money will be used for the down payment and closing costs.
If a client decides to leave the homeownership program after Landis has purchased a home for them, Landis will refund the client any accumulated homeownership savings less a 3% exit fee.
This fee is used to cover the cost of listing and selling the home.
How Heather took possession of the house
Landis and Heather agreed on the purchase price and a date when she could own it.
They came up with a financial plan that allowed Heather to make two credit card payments a month, which increased her credit rating faster.
Landis took care of all the paperwork for the process, working closely with Heather to ensure she budgeted correctly and met all necessary filing deadlines.
Heather was able to submit a cash offer for her house, which went a long way to securing her mortgage.
In August 2021, Heather took possession of the house she was renting.
Heather said: “I feel accomplished as a first-time owner, especially as a single mom and able to have a place my kids can call home.”
Are you eligible?
Landis operates in approximately 15 states in the South, Southeast and Midwest. She only works on her home ownership program.
The app is free and available online or through their free app.
Landis explained that he will approve credit scores as low as 550 with a combined monthly income of $2,500.
Petit explained: “Depending on the application, we will assess whether we are in the right position to help them immediately and for most people the answer is yes.”
Accepted participants will be given a budget to find the house they would like to buy.
They will also receive a financial plan outlining the steps to take to access the property.
A financial coach will monitor progress and resolve any questions or concerns.
Most customers who come to Landis have low credit scores.
“People with 550s have often gone through difficult circumstances and what it takes is a bit of a reset.”
Landis claims to have succeeded in making the dream of home ownership a reality for thousands of families.
Its success caught the attention of celebrities, such as actor Will Smith and rapper Jay Z.
The men invested in Landis’ last funding round in 2021.
It has raised over $182 million since its inception in 2018.
For Heather, she lives happily in her home in Greensboro.
Along the way, she needed some electrical work. It turns out that sparks flew between her and Alex, the electrician she hired. The two are now married.
What are the risks ?
As with any major financial purchase or investment, it’s best to go into it well equipped with the information you need to be on the safe side.
For Heather, there was transparency with her lease-purchase agreement. She figured out what she would pay and for how long.
This may not be the case for everyone.
If you pay rent for the entire term of the lease, the question is whether a portion of each payment is applied to the eventual purchase price.
Treat the home buying process the same as buying a house.
This means doing your due diligence, researching the area, comparing prices with other homes nearby, researching the contract, and researching the seller’s history.
We explain which states provide mortgage relief and bill up to $80,000.
Plus, how to get mortgage relief through a federally backed refinance program.
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