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WASHINGTON, DC -- Fannie Mae (FNM/NYSE) is implementing the Deed for Lease™ Program
under which qualifying homeowners facing foreclosure will be able to
remain in their homes by signing a lease in connection with the
voluntary transfer of the property deed back to the lender.
"The Deed for Lease Program provides an additional option for
qualifying homeowners who are facing foreclosure and are not eligible
for modifications," said Jay Ryan, Vice President of Fannie Mae. "This
new program helps eliminate some of the uncertainty of foreclosure,
keeps families and tenants in their homes during a transitional period,
and helps to stabilize neighborhoods and communities."
The new program is designed for borrowers who do not qualify for or
have not been able to sustain other loan-workout solutions, such as a
modification. Under Deed for Lease, borrowers transfer their property
to the lender by completing a deed in lieu of foreclosure, and then
lease back the house at a market rate.
To participate in the program, borrowers must live in the home as their
primary residence and must be released from any subordinate liens on
the property. Tenants of borrowers in this circumstance may also be
eligible for leases under the program. Borrowers or tenants interested
in a lease must be able to document that the new market rental rate is
no more than 31% of their gross income.
Leases under the new program may be up to 12 months, with the
possibility of term renewal or month-to-month extensions after that
period. A Deed for Lease property that is subsequently sold includes an
assignment of the lease to the buyer.
For additional information about the Deed for Lease Program, including
full details on program eligibility, please review the Guide
Announcement on Fannie Mae's website.
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