Home Partners of America - Michael Phillip

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Rent Single Family Homes With The Option To Buy

Home Partners of America is an excellent rent to own program for those looking to rent a single family home. Whether you need more time to qualify for a traditional mortgage, or you like the idea of trying before you buy, this home rental program has helped turn thousands of renters into Homeowners throughout the U.S!

Home Partners of America allows you to select your next rental home from the thousands listed for sale. You can then rent the home for 1-5 years, getting a rent price guarantee. At that time you will also receive a predetermined purchase price upfront for the 1-5 years. You can then buy the home from Home Partners of America at any time during your lease period, using your own lender, and without ANY competition! And another great thing about this home rental program is there is NO COMMITMENT TO PURCHASE. You can also treat this program just like a standard rental where at the end of your lease you get your security deposit back and move out. So if you end up not liking the home, you can simply use your rental period as time to find your perfect home. No penalties for not purchasing!

Rent A Single Family Homes In 5 Easy Steps:

(More details on each below)

Applying – You must first apply and get approved for a monthly rent amount prior to seeing any homes.
Searching – Once you are approved, I will set you up to receive property alerts showing you all properties that meet your criteria. You will get a daily list of homes every morning, which will include coming soon homes.
Submitting – Once you’ve chosen a home, you will receive the lease agreement with your anticipated terms. After signing, Home Partners will create a strong cash offer for the home. Once our offer is accepted, you will owe the security deposit within 2 days.
Transaction – This is more of a waiting game for you. They do need to purchase the home so you do need to wait for that transaction to complete and for them to make your home move-in ready. This process can take 5-6 weeks from when you submitted the home.
Move-In – You will owe the first months rent 3 days prior to move in. The property management company will contact you to set the time for you to receive your keys!
Right to Purchase – Along with receiving your lease agreement, you will also receive your Right to Purchase estimates. This will list out the anticipated purchase price for 1-5 years, along with how they are calculating the fees. (See below for more information on your Right to Purchase).

APPLYING TO HOME PARTNERS OF AMERICA

The application is simple and you can perform at home, or I’d be more than happy to meet with you and walk you through the application process. There is a $30 non-refundable application fee. However, the great thing is with Home Partners is that you only pay this fee once, NOT for every home you’re interested in!

I always encourage applicants to use all household incomes when applying, and apply for the most amount possible. We can always stick within your budget when shopping, but it is hard to raise that budget, even if you are $50 short after you are approved.

Pre-Qualifying Criteria: In order to qualify, applicants will need to show at least a 620 credit score, $55,000 in household income, and you must have the ability to put twice the monthly rent down as a refundable security deposit. However, Home Partners doesn’t focus exclusively on your credit score. The full credit profile of your entire household is taken into account when they review your application to the Home Partners program.

When you apply, you will need to provide proof of income for your application.

If you are employed traditionally (hourly, salaried, commissioned), you will need to upload your two most recent pay stubs.
If you are self employed, you will be required to upload your most recent tax return, and two most personal or business recent bank statements.
Just started a job? They will accept their official signed offer letter and/or paystubs (if any are available). If you have not yet started the job, they will request a contact email/number to verify the offer letter.

After you successfully apply for the program, Home Partners will notify you within 1-3 days of your approval and give you your maximum monthly rent you qualify for. If you are not approved, you will need to contact Home Partners directly as I am not provided with that information.

Click Here to Apply Now

FINDING A HOME THROUGH HOME PARTNERS OF AMERICA

You have a couple ways to find a home:

1. As your agent, I will create a customized e-alert of the location and home criteria you’ve given me, and send you a daily email with properties. In today’s market homes go FAST! But they also come on the market fast, so my alerts will ensure you stay on top of the latest homes to hit the market! The first email will have every home currently on the market that meets your criteria. The following emails will update you on changes to those homes, and new properties that have come on the market since the previous email. You will also be able to favorite homes which will notify me of your interest, and I will then pre-qualify them to make sure they will work within your budget, and also qualify for the program.

2. You can also search Home Partners website directly at: homepartners.com/find-a-home. Through their website, you will be able to search for single family homes to rent by monthly rental price or by list price amount, as well as the other typical home search criteria. While this option is great as it shows you the rental price up-front, their website often is not updated fast enough for this market. So occasionally there will be homes listed there that are not available.

HOME PARTNERS OF AMERICA’S LEASE AGREEMENT

Your initial lease is for one year, so your financial commitment is only for one year. The lease is then renewable every year for up to five, one‐year periods. You also have the right to notify Home Partners if you don’t want to renew the lease by giving them 60 days notice. If you decide not to renew, your full security deposit will be returned, and if you have been in full compliance with the lease terms. Or, if you decide to buy, you can roll your security deposit into the down payment of the home.

RIGHT TO PURCHASE AGREEMENT

Your Right to Purchase Agreement gives you the right to purchase the home for a predetermined price. This will go up for every year of your lease. You are under no obligation to buy the home from Home Partners and there is no penalty for not purchasing.

YOUR RIGHT TO PURCHASE PRICE

While your rent price will remain as stated in your lease agreement, your right to purchase price is only an estimate. There are many factors that go into this price. The largest one being the amount the acquire the property for. They will typically submit a strong competitive offer, and if this is higher than the list price, your right to purchase price will reflect this increase as well.

To calculate your purchase price, Home Partners takes the purchase price they paid to acquire the property, and add appreciation to that price. They currently add 5.5% in most Colorado markets. The purchase price will also include their closing costs, HOA transfer fees (if applicable), make ready costs (costs they incur to make your home safe and livable prior to move-in), and they also include a repair and maintenance reserve.

When you sign your lease agreement, you will get a Right to Purchase price that will reflect the highest amount you will pay for the home should you decide to purchase it. On average, this is typically closer to 7% of the purchase price of the home. However, if they do not have to repair or replace anything, they acquire the home for less, or there are no or minimal maintenance requests during your lease, then your Right to Purchase price will decrease accordingly. They just want you to know the maximum you will pay, but it often does go down in most cases.

Click Here to Apply Now

ADVANTAGES OF HOME PARTNERS OF AMERICA

Unlike a standard lease agreement, you will have renewal options providing five years of rent certainty. And you also get the Right to Purchase price at the time you enter your lease Agreement. This locks in the price of rent and the purchase price, no matter what the market or future appraisal value shows! For example, if your first year Right to Purchase price is $400,000 for your home, but the home appreciates to $450k in that year, you will buy your home with $50k in instant equity, and not pay more due to competition!

You select your home that you want to live in from those eligible and available for sale in communities Home Partners serves. And lucky for you, their service area is MOST communities along Colorado’s Front Range. This opens you up to potentially hundreds of more homes than are likely listed only for rent.

Another great advantage is having a property management company with experience. You do not need to worry about waking up the private landlord in the middle of the night, or a landlord that doesn’t respond for days, or a manager who takes vacations. The property management company will be there for you 24/7!

And you get my help throughout the process, at absolutely no cost to you! I am a licensed real estate agent, who will guide you through the entire process. As soon as you apply I will be emailing you a list of all the properties that are for sale that meet your criteria. I typically suggest you choose from the 3-5 best homes you see, and then we go see them! You choose one and I will submit that to Home Partners for approval (which is typically less than 24 hours!). I will be there for you throughout this process to answer any questions on the home for you and update you along the way.

DISADVANTAGES OF HOME PARTNERS OF AMERICA

I wouldn’t be transparent if I didn’t mention some of the disadvantages of the program. The key issue people have is that you will need to wait 5-6 weeks after we go under contract with the home before you are able to move in. Home Partners’ is buying the home, so we still have to go through the home purchase transaction. This can typically take 4 weeks. They then need to make any repairs and make the home move-in ready for you. This can take the additional 1-2 weeks.

Security deposit is 2x monthly rent

You will also owe twice the monthly rent as a refundable security deposit. This is because Home Partners is making a cash offer on the home, so they would like to make sure their large investment is protected. As long as you satisfy all the terms of the lease, you will get the full security deposit back! Or, if you decide to purchase, the security deposit can also be rolled into the downpayment for the home. The security deposit is due upon Home Partners submitting an offer on the home. This is to make sure you don’t back out, as they are then under contract to purchase the home. You will not owe your first months rent until roughly 5-6 weeks later, 3-days prior to moving in.

Move-in date changes

Home Partners of America does have to purchase the home you would like to rent. This means that there are chances the closing date, and thus your move-in date, could change. This is rare, but can happen due to unforeseen snags during the transaction. Or the deal can even fall through all together for various reasons. If this occurs, you would not be able to move in to the home you’ve chosen. While these circumstances are uncommon, delays and terminations can happen. Therefor a plan should be in place to extend your current living situation in the event this scenario does occur.

The home may not be worth the Right-to-Purchase price

And lastly, the Right to Purchase fees can be expensive. You can expect to see that the Right to Purchase price and all associated fees for the first year to be around 6-7% of the purchase price of the home. However, this is a high estimate and will likely be lower. If the maintenance reserves and repair costs are not needed, the purchase price will be reduced accordingly.

Depending on the market and your purchase price, you may not be able to get a mortgage for the home if you end up wanting to purchase it! If the home’s value exceeds the purchase price, GREAT news! You can get the home for under market value. However, if the purchase price is above what the home is worth when you are ready to buy, many lenders will not lend you the money to purchase the home without you covering the difference. And that could be tens of thousands of dollars.

Moving from out of state? READ THIS

The Home Partners of America rental program can be a great option for those moving to Colorado. Especially for those who want to rent in order to get to know the area prior to buying! And if you end up liking the home and area you rent in, you have the option to stay put and buy the home! So you can then relax knowing you do not have to move again. But it’s also nice to know you are under no obligation to stay in the home beyond your lease. And that there is no commitment to buy it.

However, for my out of state clients, this program does have some unique challenges. And I want to specifically discuss these hurdles here, and also discuss how to best navigate around them.

Selecting a property

The largest hurdle I see from out of state clients is viewing and selecting a property. Home Partners does require you to physically view the property and sign an affidavit you have done so. What I suggest is that you plan a time where you can visit, that will include at least two weekends. This is because I cannot guarantee that Home Partner’s offer will be accepted. So it is often wise to schedule at least two visits to the area, or stay here through two weekends. In the event our offer on the property does not get accepted, you will then need to view and select another property.

Move-in date

Another hurdle for my relocation clients is the move-in date. With this program, the move-in date is typically 5-6 weeks after Home Partners goes under contract with the property you select. In order to extend this date, the seller has to agree to extend the closing date as well. Which many sellers may not want to do. Or for us to move up the date, all things throughout the transaction need to go very smoothly and all parties need to agree on that as well. The soonest move in date that is likely possible is be 3-4 weeks from the day of the contract signing.

There can also be delays due to unforeseen circumstances that occur during the transaction. While rare, a delay that pushes the closing date back, would then push your move-in date back. Because of this, I always also suggest they have a flexible move-in date or they have a contingency plan.

USEFUL HOME PARTNERS LINKS

FIND HOMES IN YOUR AREA
APPLY TO THE PROGRAM
FREQUENTLY ASKED QUESTIONS
CONTACT HOME PARTNERS

Information on Home Partners’ and Colorado Homes by Mike website’s are not guaranteed. Information provided exclusively for user’s personal, non-commercial use. This information may not be used for any purpose other than to identify prospective properties in which users may be interested. Home Partners is not a mortgage company, does not have any obligation to provide and does not provide financing and cannot guarantee or in any way assure that a resident will be able to obtain a mortgage if and when he/she wishes to exercise the Right to Purchase.

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