What's the best option?

General Real Estate Investing
1

I have a home that is currently rented as a section 8, the current occupant would like to purchase the house but do to credit score and no down payment money, can’t get a conventional loan. I would like to possibly do an owner finance or lease option. Either way, the tenant would have to get off section 8 to do this. The tenant has an excellent pay record with us and the previous landlords. I would like to find a solution that would give me the most protection and the best financial gain as that is ultimately what we are all in this for… any ideas would be greatly appreciated.

A little about the house: 3-2-2 renting for $825/mo we owe 62.5k on the existing loan. The comps on the houses around us sell for 95k.

IF we did an owner finance, what interest rate would be fair? The credit score is pretty low from several years ago… Where can I find contacts for owner financing? Would a contract for deed be a better way to go?

Thanks for your help on this!

2

This sounds a little strange to me. If the tenant has the income to buy a house, pay taxes, insurance, maintenance, etc, be it via seller financing or conventional mortgage, why is she on Sec 8? Did something just change in her financial situation? If so, she will probably be losing the voucher or will have the government portion decreased soon anyway, since she is required to report any change in status or income to her case worker.

If the credit is that poor, and she has had no home ownership experience, I would hesitate to owner finance.

As far as the credit score, if the problems were a few years ago, perhaps her credit score can be raised. Maybe a credit counsellor can help her to qualify for a conventional loan.