- Step 1: Enter into a Deed-in-Lieu of Foreclosure agreement with Fannie Mae.
- This agreement means you have agreed to give title back to Fannie Mae in exchange for forgiveness for defaulting on your mortgage terms. It must be in place for you to be eligible for the Deed for Lease program. It will impact your credit score, but the impact will be less harmful than a foreclosure.
- Step 2: Fannie Mae determines borrower eligibility and contacts a property manager to start the Deed for Lease process.
- Step 3: Property manager inspects property and imposes lease conditions.
- This includes setting the rental rate for the next 12 months.
- Step 4: Fannie Mae approves
- If you don’t qualify for the Deed for Lease program, the normal Deed-in-Lieu of Foreclosure process will continue- you will lose the home and won’t be able to stay there as a renter.
- Step 5: Property manager becomes sole administrator of your new lease
- Borrower must:
- Have a Fannie Mae mortgage in a Deed-in-Lieu of Foreclosure agreement
- Have requested and been denied a loan modification
- Show that the rental rate won’t exceed 31% their monthly income
- Not be involved in bankruptcy proceedings
- Have made at least 3 payments since the loan started or since the last modification.
- Not be more than 12 months past due on payments
- Property must:
- Be in good condition
- Be borrower’s primary residence
- Be in compliance with local rules and laws
- Be released from any subordinate liens
For more information on your rights in distressed Real Estate, consider contacting a Seattle Real Estate Attorney.
Weitz Law Firm, PLLC
520 Kirkland Way, Ste 103
Kirkland, WA 98033