Now that you are learning about the possibility of buying a home without a mortgage, here are some steps you can take while we are educating the landlord community about using a Qualified Contract for Deed™ (QCD™) to sell their rental properties to you as an owner-occupant.
A. Landlords:
- The first technical question is whether the home is “separately deeded” so that you know if it is eligible for this type of sale. Condominium units, most houses, rowhomes, and some duplexes may be separately deeded. If you are in an apartment building with one owner, this ownership system will not work. If it is separately deeded, you should send the landlord to this website to learn how it works and whether it is right for them.
- We hope to be working with state and local housing agencies, including HUD, to provide counselling on the use of a QCD™.
- Some down payment assistance programs are available from State and Local governments, and the Federal Government is proposing down payment assistance using tax credits as well. This type of sale qualified for the last time Federal down payment assistance was offered.
B. Ideas to locate a home and landlord that will use a QCD™ to sell to you:
- Contact local Real estate professionals. Some may know of listings or rental units who are open to offer seller financing; our website makes it easy for a landlord to learn about the process, value the property, and decide if they want to use the program. There is also a section for the real estate professional to read.
- “Rent-to-Own” websites. An internet search shows a wide variety of these websites, with some interesting claims by them of many houses available. Most of these sites offer a trial membership, and a number of them have real estate agents who can work with the current owners to see if they want to use the program. They also list some bank foreclosure properties that are available, which might consider using our system to sell to you.
C. General Budgeting for your home:
- Everyone has a different situation, but most experts recommend that 30% of your income is a reasonable allocation for housing. Remember that property taxes and insurance are now your responsibility as the new owner, even if you forward the money to the seller to pay those expenses. Unlike a mortgage, if you use a higher percentage of your housing budget at the beginning of your contract for monthly payments, that is your decision and often quite manageable for first time buyers.
- The experts also recommend that you maintain a reserve of 3 to 6 months of monthly payments in case of job change or other unforeseen circumstance. We will be exploring job loss insurance programs to help cover such events.
