Fannie Mae Deed for Lease ProgramAllows Foreclosing Borrowers to Rent Their Home With the D4L Program
Fannie Mae's Deed for Lease (D4L) program allows homeowners facing foreclosure to stay in their own home by renting from Fannie Mae for up to a year or more.
Homeowners facing foreclosure with a Fannie Mae mortgage who do not meet the requirements for a loan modification can stay in their homes with Fannie Mae's Deed for Lease program. Borrowers have to pay market rate rent, but those payments are usually cheaper than the old mortgage payment. In exchange for giving up ownership of their home, the Deed for Lease program allows borrowers to stay in their home for an additional period of time. There are D4L tenant provisions that allow renters to participate as well. Deed for Lease RequirementsThere are a few requirements that need to be met to qualify for the Deed for Lease program. The borrower requirements are:
There are additional property requirements as well:
Getting a Fannie Mae Rental LeaseTo begin D4L, contact the mortgage servicer requesting participation in Deed for Lease. The bank will begin the process for a deed in lieu (DIL) of foreclosure and forward the borrower's information to a property management company for purposes of qualifying the applicant for a lease. Someone from the property management company will call within three business days to get information needed to qualify for a rental lease. A $75 non-refundable lease application fee payable to the property management company is required. If the lease is approved, the management company will notify the applicant of the terms of the lease, including the rent. If the terms of the lease are acceptable to the applicant, he can sign the lease but it will not be effective until the DIL has been accepted by the mortgage servicer. If the property is sold during the initial or subsequent lease, the lease will be assigned to the new owner, so tenants do not have to worry about having to vacate unexpectedly. The Deed for Lease program helps both the borrower deal with the foreclosure process while allowing the community to maintain property values by not putting too much housing inventory on the market at a bad time. Those who are in homes with Freddie Mac can take advantage of a similar program that provides for month-to-month leases. Readers interested in this article may also be interested in reading about the effects of late mortgage payments as well as the process of applying for bankruptcy. References: Timiraos, Nick. "Fannie to Rent Foreclosed Homes." Wall Street Journal (November 5, 2009). Fannie Mae. "Fannie Mae Announces Deed for Lease™ Program" (November 5, 2009).
The copyright of the article Fannie Mae Deed for Lease Program in Mortgages/Loans is owned by John Wu. Permission to republish Fannie Mae Deed for Lease Program in print or online must be granted by the author in writing.
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