A new lease-to-own program has entered the Tucson market with the goal of preparing more people for homeownership.
The program allows potential homebuyers to lease a home for up to five years and use the appreciation of the house’s value as a down payment when they are ready to buy it.
Mortgage company Trio is partnering with Pima County’s Industrial Development Authority on the program.
“Some of our residents need an affordable, secure path to homeownership when traditional mortgage financing is not attainable,” said John H. Payne, Pima IDA’s president. “We are excited about this partnership to help young families and others prepare to purchase their first home and experience the benefits of homeownership.”
Instead of starting with a mortgage, people can lease the home with the option to buy it in 24 months, said Darryl Lewis, Trio’s managing director.
During the time of the lease, the person is required to participate in financial counseling for matters such as savings and credit management.
Both new and resale homes are eligible up to a maximum price of $325,000.
The price and interest rate will be locked in for 30 years at today’s rates while the occupant saves up for a down payment.
“Mortgages aren’t right for everyone right now,” Lewis said.
After 24 months, the situation is evaluated to see if participants are ready to own or need more time in the lease, assuming they are taking all the required steps. If not, there is a $795 move-out fee to leave the program.
“We don’t want to create a rental market, but a homeownership market,” Lewis said.
To qualify, participants must have:
- Minimum 580 credit score
- Minimum $3,600 monthly household income
- 24-month clean housing history (on-time rent or mortgage payments)
- Minimum $2,500 in savings
- Maximum debt-to-income ratio of 50 percent
The program is privately funded and the role of the IDA is to promote awareness of the option. Trio receives no government subsidies.
Visit thinktrio.com for more information.