28 Aug How does REAL compare to a mortgage?
REAL offers many of the same benefits as a mortgage. It lets you get into the home you want; own the home in the future at a fixed price; and gives you the right to sell the home and keep the difference between what is owed on it, and the sales price.
- REAL payments are slightly higher than a typical mortgage payment, but usually less than a comparable rent payment.
- REAL’s Acquisition-Premium payment and fees are roughly in line with what most conventional mortgage lenders require.
- REAL is a lease. A trust buys and holds the title to the properties.
- REAL lease payments do not create equity (although home price appreciation does).
- REAL has different, less stringent, set of underwriting criteria.
- If home prices decline, the most that a consumer would be responsible for is the amount of their Acquisition-Premium, not the entire underwater amount.
- A default of the Program Agreement results in an eviction rather than a prolonged foreclosure action.