two years alone, home prices in Seattle have risen 42.5% (from July 2014 to July 2016). A would-be homebuyer is drastically behind the curve if they are forced to wait on the sidelines to meet mortgage seasoning requirements while the housing market passes them by.
The solution: Home Partners of America. What HPA does is essentially buy the house upfront, then lease it back to the clients for up to 5 years. They guarantee rent won’t rise more than 3.75% annually, and over the course of those five years, the tenant can buy the house for a pre-set price which slightly increases annually – in Seattle it’s 5% per year. That 5% appreciation rate is a FAR cry from what housing is actually appreciating at here in Seattle, but yet it’s also a high enough return given the risk that it makes a business like this viable, and attractive to investors.
Home Partners has grown incredibly fast over the last few years mainly due to its ethics. It’s a straight forward lease to own business that doesn’t take advantage of clients like some other companies in this industry have done in the past. The company now operates in 38 markets across the nation, and owns around 5,000 houses (about 250 in Seattle). It might be the best option for someone waiting to meet their seasoning requirement before they can be approved for a mortgage, but it’s definitely one worth knowing about. Read more about HPA here: http://www.bizjournals.com/
seattle/news/2016/08/23/ex- goldman-sachs-execs-new- company-helps-kent.html
Today's blog courtesy of Kyle Bergquist, Guild Mortgage