Home Ownership Program aims to help applicants in a competitive housing market
WILMINGTON, NC (WECT) – A homeownership program once helped a Wilmington family land the deal on their dream home – but experts say it’s not a program the world can benefit.
Earlier this year, the Castillos were looking for a new home.
“We tried to stay in New Jersey, but the rent just went up just for a small apartment or something,” Jefferson Castillo said. “We went to Wilmington and we went downtown and we had lunch, went to the beach and had fun. We both looked at each other at the end of the night and thought, “I think we could move here in a few years. » »
The problem was the couple’s financial situation. After the difficulties related to the pandemic, they were newly independent. Although their jobs as social media content creators gave them a steady income, they hadn’t been doing it long enough for mortgage lenders to agree to work with them.
“After hearing constant rejections because we didn’t have that consistent income, I talked it over with our real estate agent, like ‘I’m just letting you know, we need a house but what are our options?
That’s when real estate agent Rob Flannigan told the family about Landis.
“Landis is a homeownership company,” says company representative Michaela Haberer. “Basically, a client would apply and if we see a path to homeownership within the next two years, we buy the house with cash and they move in until they’re ready to lend.”
Landis will submit cash offers for homes priced between $110,000 and $500,000 and ready to move into. To qualify, applicants must have a minimum credit score of 550 and a minimum salary of $30,000.
Program participants have up to two years to rent from Landis, but can repurchase the home at any time if they feel ready. Meanwhile, Landis walks attendees through preparing their finances for homeownership while setting aside some rent payments for a down payment.
Much like the Castillos, Just for Buyers Realty’s lead broker, Jennifer Reinholt, thought it must be too good to be true — until she did some research.
“The app is free, so really, I mean, why not, to see if that might be an avenue that might help you beat another offer?” said Reinholt.
There is, however, a small catch.
“The true cost of the program is when customers buy it back, it’s three percent above the original appraised value,” Haberer said. “If we buy a house with cash for $200,000, when the customer buys it back anywhere between the next day and 12 months later, it’s 3% above the original appraised value of $206,000. “
That’s not all Reinholt says buyers should keep in mind. After many families have lost their main sources of income due to the pandemic, there is reason to hesitate if you are not on financially stable ground.
“Make sure you feel very secure in the position you’re in, that if something were to happen, would you be one of those, you know, who could lose their main source of income,” Reinholt said. . “I think for me what might be a bit scary is that there’s no longer any assurance that the job I have today, I’m going to have it in six months.”
For the Castillos, the risk was well worth the chance to buy the perfect home for their growing family.
“[Without Landis,] I think we would still be on hire,” Amirah Castillo said. “We couldn’t get a traditional loan, so we would always be renting and hoping to find a place that would accommodate all the kids we had with the one that was on the way and still have our space preferences. .”
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