Deed-for-Lease Option

What is Deed-for-Lease?

The Deed-For-Lease™ option is a program from Fannie Mae that allows you to lease your home after you have transferred the title to your property to the mortgage company (commonly called a Deed-in-Lieu of Foreclosure). The lease terms are up to 12 months (with the possibility to extend longer). And the monthly rent is based on the current rental rates for your area—not on your original mortgage payment.

Deed-for-Lease is an alternative to foreclosure and may be an option if:

• You are ineligible to refinance or modify your mortgage
• You are facing a long-term hardship
• You are several months behind on your mortgage payments
• You may owe more on your home than it’s worth
• You have not been able to sell your home
• You want to remain in your home and neighborhood

Find out who owns your loan

Deed-for-Lease is available for loans owned by Fannie Mae. To see if your loan is owned by Fannie Mae, click here.

Important! If your loan is not owned by Fannie Mae, there may be a similar leasing option offered by your mortgage company. Always contact them to see what is available.

What are the benefits of a Deed-for-Lease?

• Eliminate or reduce your remaining mortgage debt
• Resolve your delinquency and avoid foreclosure
• Stay in your home and neighborhood—no need to move or relocate
• Lease at current market rate rent for up to 12 months with a possible option to extend the term
• Pay no security deposit
• Assistance for relocation may be available at the end of your lease
• Start repairing your credit sooner than if you went through a foreclosure
• May be able to get a Fannie Mae mortgage to purchase a home sooner (in as little as 2 years) by executing a DIL than if you went through foreclosure (at least 7 years)

How does it work?

If your loan is eligible for Deed-for-Lease,

1. Your mortgage must be owned by Fannie Mae—click here to check
2. Your mortgage company will refer you to a property management company that will inspect your property and review your financial information
3. You will sign a lease agreement (if you qualify for the program)
4. You will sign a Deed-in-Lieu of Foreclosure (DIL) to transfer title to the property to Fannie Mae
5. Your lease becomes effective once the DIL is complete/accepted by Fannie Mae
6. You will remain in the property according to the lease terms paying monthly rent
7. The property management company will manage the property and collect the monthly rent

Next steps

	Gather your financial information—Make sure you have your basic financial and loan information on hand when you call your mortgage company. You’ll need: your mortgage statements, including information on a second mortgage (if applicable) your other monthly debt payments (e.g., car or student loans, credit card payments), and your income details (paystubs and income tax returns).
	Explain your current situation—Be ready to outline your current hardship and explain why you are having trouble making your mortgage payment, why this is a long-term problem and why you are wanting to transfer ownership of your home and lease it back. Your mortgage company will need to understand the reasons why you are having difficulty in order to find the right solution for you.
	Contact your mortgage company—Tell them you are interested in the Deed-for-Lease option and you want to see if you qualify.

Your mortgage company wants to help you avoid foreclosure and, in most cases, will be willing to work with you. Contact them as quickly as possible to determine if you are eligible for the Deed-For-Lease™ option. If you need further assistance (before or after contacting your mortgage company), contact a Housing Counselor.