Financing Options for Current Tenants to Buy Rental
Hello - I have tenants in a rental home in the Cleveland area who have rented the home for the past 12 years, excellent tenants, always pay on time, etc. They're a married couple, both self-employed. They want to buy the home from me but are running into issues with debt to income ratio, so not eligible for FHA. They do not have the 20% to put down on a $209k purchase price. They currently pay $1350/mo for the rental.
Are there any creative options for making this work or something we're missing? Could I loan some of the deposit and retain equity in the home for when they eventually sell or buy out the rest of the equity?
Most Popular Reply
You have many possibilities:
Research Contract for Deed & Seller Carry back financing.
If they were able to qualify with a non QM lender for the 1st Mortgage you could possibly have a 2nd position loan with an equity participation component. Be sure to consult with an attorney to review & discuss.