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  • Fannie Mae Lease Home Program


    Homeowners in danger of losing their homes through foreclosure may be able to keep them by leasing them temporarily under Fannie Mae’s new program, Deed for Lease, and becoming tenants in their houses.
    Under the program, owners who qualify would temporarily sign a lease. The property would temporarily revert back to the lender, and the person in danger of foreclosure could still live in the house as a tenant. According to Fannie Mae, thousands of people who might otherwise lose their homes could be helped and could live in their homes at least another 12 months.


    According to Jay Ray, Vice President of Fannie Mae, the program will help those who could not be helped by Fannie Mae’s other programs, those who "are facing foreclosure." He said he believes the new program will help "some of the uncertainty of foreclosure." He also said it will help stabilize neighborhoods because families will be able to stay in their homes "during a transitional period."
    Fannie Mae is not specifically a lender and does not lend money to individuals. Instead, it works with brokers, bankers, and other mortgage partners to make certain they have adequate funds to lend to consumers.

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    In September of 2009 about 4.45 percent of Fannie Mae’s borrowers were seriously delinquent. According to Fannie Mae, statistics are not yet available as to how much the Deed for Lease program will cost or how many homeowners will be eligible to participate.
    Although homebuyers would have to give up the deed to their houses, they would be able to rent their houses at market rate for at least year. According to Fannie Mae, some leases might be renewable after that on a month-to-month basis.

    Those eligible for the Deed for Lease program include those who live in their homes as their primary residence. They also must be released from any subordinate liens on the property. In addition to those owning or purchasing the homes, their tenants may also be eligible for leases. Those interested in the program must show that the new market rental rate is no more than 31 % of their total income.
    Fannie Mae answers questions about the Deed for Lease program on its website. The topics include subleasing (which is not allowed), whether someone who is at first interested in the new program may change their minds (it depends on the circumstances), and what one can do about pets.

    According to Fannie Mae, certain pets pose a "liability threat" to both landlord and tenant. Those who own pets must, for that reason, have renter’s insurance. The insurance must include liability insurance for pets. Fannie Mae must be named as an additional insured in the policy.

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