Renting a home with the option to buy is a growing trend across the United States.

The recession left many foreclosed houses vacant and distressed, but it also left many former homeowners and would-be buyers saddled with bad credit and unable to qualify for conventional mortgages.

Today, lease to own is a viable option mainly in three situations:

A buyer wants to flip homes fast
A landowner is anxious to move on
A developer wants to reinvest in a community and entice stable people to live there.

For prospective homeowners, rent-to-own deals give them a place to live while they rebuild their credit and save money for a downpayment. It’s a win for the landowner because someone now takes over basic home maintenance – plus the residence generates a monthly income, and there’s a buyer waiting when the owner is ready to sell.

Developer John Foley takes the rent-to-own concept to a higher level. He and his business partner, Phyllis Peterson, plan to purchase 52 distressed homes in Omaha, renovate them, and offer them in using a rent-to-own option to the local working poor. The plan hinges approval by the Nebraska Investment Finance Authority, which would need to earmark nearly $6 million in federal low-income housing credits for the project.

Source: US Finance Post