Buying & Selling Real Estate
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback
Your thoughts on Rent to Own w/ Home Partners of America (formerly Hyperion)
I have a close friend whose realtor has convinced him to apply for Home Partner of America's rent to own program. I believe this company used to be Hyperion Homes.
He asked what I thought - I told him I had no idea. Does anybody here have any experience with these guys or guys like them?
Sounds like it would go something like this - They buy the house you pick, you agree to a 2-month security deposit and to rent it for above market rates, you then have the option to buy it after a year at 5% above their original purchase price provided you can finance it.
Are these guys and their programs legit? Is the process as transparent as they make it seem?
Thanks in advance.
I was doing some research and it sounds like a rip off to me. If you go to their website and do some of the calculations, even if you buy the home in the first year, you are way over paying for it. The house price goes up by between 3.5% and 5% per year based on the last year price. If the house doesn't appraise that high, you either pay the difference or loose everything you've paid in. Plus in our area, for a $250,000 house, they want between $1840 and $1940 per month, plus they add on extra fees, their initial closing costs, a minimum of $2500 in "maintenance repairs" and charge your for any repairs that were made while you were living there. I wonder how many people are actually able to even purchase the homes after all of that
Yes, there are cons with Home Partners of America, but you have to understand, it's a business and they do have to be allowed to make money for investing huge money in a house. I'm in the process of getting a house with them. Yes, I do understand that the rent is higher than a normal rental, but I also know that I was able to choose the exact house I wanted, and I wasn't stuck with a typical "rental house", which is usually in not great condition and is outdated. I also understand that if I decide to purchase the house in a year, I'll be paying more than the market rate. There's one really good thing that hasn't been mentioned yet. I really wanted the house I'm getting, as it's in the neighborhood I want to live in, so I told my agent to submit an offer on the house. Apparently, there was huge interest from other buyers in the house, so it received multiple offers. Guess who got the house? Me. Why? Because Home Partners pays CASH for the house, and buyers will almost always take the cash offer over all other offers. That in itself to me, is worth the extra money I'll be paying.
I personally was in the Home Partners Program with Pathlight managing the property. Had problems from the beginning, not the program itself but getting through process and after the move in time. Pathlight didn't respond easily to needs I had, had to call a lot of times. Then, I put in a bad review on Google about the crappy service receiving and then they wouldn't take my payments anymore. Wound up getting evicted because Pathlight wouldn't let me pay my rent. They even had shady lawyers do the dirty work, no notice, just evicted. Home Partners and Pathlight are just crappy companies
I just closed my 3rd home transaction with Home Partners, and have another closing this week, and 4 other clients approved - I'm not sure why the negativity with Home Partners? As a Realtor since 1999, it's a really excellent program for folks to lease-to-purchase a home, until they get their down payment and/or credit situations fixed. The program gives you 5 years to buy the home for a 2-month security deposit, and all they ask is a "5 percent" return/profit per year. In Denver, our homes are appreciating 12-18% per year, so my clients KEEP the 7-12% additional equity they earn when I do a lease-to-purchase - and then purchase the home in a year or so!
Why rent some junky un-remodeled home, when you can lease-to-purchase a beautiful, nearly new remodeled home off the Denver MLS - for the same $75 application fee & 2 months security deposit???
In theory, the HPA program seems like a great deal. In practice, I have one transaction under my belt and it will be the first and last.
1. The whole transaction was fraught with un-answered questions and lack of clarity. I could not get a copy of the lease agreement my client would sign, so my client finally sent it to me. Neither of us could get a list of what repairs would be done and what the charge would be.
2. There were substantial repairs needed for the house. I was told HPA would "take care of" everything on the inspection report.
3. Of the 20+ items on the inspection, only 2, TWO, were complete. It has taken 3 months for the tenants to get a copy of the paid invoice/work order from the management company "Pathlight". They paid nearly $5,000 for work that was not completed, and this "make-ready" cost will be added to their purchase price should they decide to buy the home. It has been a nightmare for my clients, and I will not recommend this purchase method to anyone. It's ripe for a class action fraud lawsuit in my opinion.
DON'T DO IT!!!!! Our realtor offered us this program and made it sound amazing and it was a lie. Once they got my $3000 deposit, I couldn't pay them to talk to me, no one would take ownership of my account, very rude, there was a problem with the inspection and they would not give us any information, even my realtor knew all the details and tild me she couldn't say anything. They are not honest, and forget trying to speak with them, impossible!!!!!! We are managed by Pathlight Properties, they are thugs, treat you like you are trash, very unprofessional!!!!!! Needless to say we will not be buying the home and now they have been so dishonest that who knows if we will even get our $3000 and $300 pet deposit back!!! Stuff keeps breaking in the house, very very disappointed, what sounded like a dream has turned into a nightmare. Please don't do business with them!
SCAM - They took too long to process my application and then denied it when I didn't want to include my husband's income because he would not be moving for another 6 months due to the kids being in school out of state. The house I wanted was taken off the market and rented because of how unresponsive they were. The biggest problem is that there was no disclosure that you could be disqualified for debt/equity ratios. The assumption was that I couldn't buy a home, but that is not true. I was already pre-approved in Texas to purchase my home when we had a house fire that delayed the appraisal process. The customer service people who called did not fully disclose the rules and I was forced to pay a fee for application processing, including a background check which is not required in the home buying process. There qualification standard is more difficult than the regular home buying process. If the ultimate purpose is to help people buy a home, then they are in the wrong business. My recommendation is to stay clear!
I have researched this for the last 3 days. This is a scam to entice lower income and poor credit buyers into purchasing something they will end up owing more then they can afford. the reason for everyone over 18 to fill out the application is because everyone over 18 will be financially responsible for the debt. They entice you to buy a house and pay higher rent that will increase each year. NONE of the money will go to the cost of the house if you wish to buy. They also add a non-existent 5% value to the the house each year. To buy you then will be stuck paying 20-30% above value if a house at rates above normal in the attempt to have you fail. afterwords, they ether try to hook another buyer and do the same 1-3 year collection of rent to over extend them or they will outright place the house on the market at inflated amount and sell it to get it off their books.
HERE IS THE KICKER!!!, they do not finance the loan, you still have to find your own mortgage. If not, you loose. NO MORTGAGE COMPANY WILL MAKE A LOAN AT 20-30% OVER THE VALUE OF THE HOME. they will offer fair house value (In thiir example 190K) and you will have to come up with the $30,000-$40,000 overage yourself.
Please use your head and do the math first. if you don't understand how it works, go to a professional financial planner, for a couple of dollars, they may end up saving your entire financial future and any credit you may already have. If it looks to good to be true, it usually is.
This program ONLY helps realtors selling the houses and Home Partners Of America personal. If I am wrong, Please show me any incorrect statements and I will apologies and remove them.
has anyone rented a home thru homepartners of America then decided they didn't want to purchase it , moved and gotten their security deposit back ? I'm thinking they are going to try and nickel and dime things to death so they don't have to give it to me. Plus no one can tell me if the costs of the repairs I've needed done over the past few months is going to come out of my deposit
There are many agents in my office who use this program. It's a tradeoff for the buyer. It gives them opportunity to purchase a home at a price that is (likely) going to be lower than the market price in a few years while they work on improving some of their finances.
If the buyer is already well qualified they should go ahead and purchase for sure! But if not, the program does offer opportunity.
Similar to FHA... You have PMI the entire life of the loan AND a funding fee!!!! If you have to choose between renting a few more years and hoping your market doesn't get too "hot" versus paying PMI... it's up to the buyer, there is a tradeoff, run the numbers and compare.
If you can purchase conventionally with a larger down payment you should always choose that route. I always advises my buyers to compare conventional versus FHA and think long-term not short term.
Summary...I don't think program is bad.. but there is a trade-off that definitely needs evaluation for every situation.
I've heard many scenarios concerning both HP and the Road Home. I was originally introduced to HP as a bridge. Unfortunately from what I can see at this point this bridge may not be for me. According to their site, my estimated rent is about $2100. This equates to a move in cost of $6300 (two months deposit plus 1st months rent). I haven't been able to get a clear answer, but I really do not want (or need) to rent for a year, paying $300 per month more than my mortgage would be. And then being required to pay an $17k more than today's listing price.
"Well if you can get a mortgage, why are you looking at HP?"
I'm glad you asked. Our BK was discharged in October. Because we have school aged children, we need to move in August. At this point we have not yet found an underwriter who is willing to waive the VA guideline for the two months needed. As a 100% disabled vet, I would have not out of pocket cost associated with this home purchase.
It does not appear that this would be the case with either of these programs.
This is not an area where the prices are skyrocketing as they are in Southern California. So while a 3% annual increase might be acceptable, 5% is out of the question. And VA will not provide a loan on a house that does not meet their standards.
One other thing that wasn't mentioned is that you can start this process with HPA, with your own Realtor. Mine has heard of the program but she's never done business with them. So your best bet is before you even think about applying for a mortgage, or going with HPA is to find a realtor, and take the time to build a repor' with them. It makes all the difference when you have a realtor who is looking out for your best interests.
I'm 42, married and we have 2 kids. Both of us need to get our credit established. We both filed BK, 15 years ago and have been paying cash for everything. So our DTI is null. Here's the problem, I have a criminal background. Before my kid's we're born, I had a bad pain pill addiction, and unfortunately I was no longer in control of my life and proceeded to break the law by forging prescriptions. I now have 2 drug felonies on my record.
The ability to rent was created back in the day for folks who didn't qualify for a mortgage. But now the folks who don't qualify for a mortgage, are being asked to go through the same credit qualify -ing process plus criminal background check to live in an apartment complex and what is happening to those folks??? They are denied to live in the one place that was originally created for them in the first place!! Where does that leave my family and all the families that need and want a nice place to raise their kids and spend their time??? It means that we get to sleep in our cars, or we get to hang our heads in shame because after being sober 15 years with 2 kids I'm once again living with my parents because we can't find a decent place that we qualify to live in. And see I'm sorry but even though you have 15 years sobriety, the company who manages this building will not accept any family who has a member who's a felon. Guess who ends up having to pay for something I thought was far in my past?? My kid's do. My sweetheart's who now have to go through life living in a car or living at Grandma and Grandpa's because of some issues mom had years ago and even though mom is a totally different person, everyone else still sees her as a felon.
HPA's pricing, rules, and policies we're created because people pay them. We have to. We wouldn't need too but the world has changed. Things were once created for all in mind and now things are created with money in mind. And there's nothing we can do about it. We go on living life to try and make it easy for our kids but it's only going to get harder for you and me to have a nice home and drive a nice car.
Perhaps you should investigate HomePartners before you comment. They provide a service for people who, for some reason or another, cannot get a loan right now, but have a unique need. Perhaps they need to have their children in a certain school district, or are moving across the country and do not know the real estate market here. I have found that our rental market is very tight, and the possibility of finding the perfect rental house, with the perfect circumstances is very slim. Therefore, my clients and I go into the purchase market, find a house that fits their needs from the purchase inventory, which is generally many times larger than the rental inventory, and upon qualification, HomePartners buys that house for them. They rent the house to the clients, for a minimum of one year, at market rents, with the tenant having the option, but not the obligation, to purchase that house from HP during the lease period. Yes, HP does increase the price over what they have in the property by a small percentage, but in our market here, in some cases the homes are appreciating at a higher rate than HP charges. Lets assume they ask for a 5% annual increase. Some neighborhoods here are appreciating at double that rate. So in theory, the buyer can get a good deal when they buy from HP, because the price is locked in at the beginning of the lease. The best part? The tenant only has to move one time. Its a win win for both parties if the agent does his or her job properly.
My husband and I have recently found out that he is the only one financed to buy a house. It was being offered as a recommendation from 3 different lenders on how to go about getting a place - divorce. He is only approved for $199,000. Which is absolutely nothing in California. The house that we have been renting for the past 4 years is now on the market, so as to our search to find financing. My daughter goes to a great school out here and with an IEP - they won't just pass her along, they will actually teach her. Moving is stressful enough, add a special needs child to the mixture and no one really wants to move at all. Through a ReMax website there was Home Partners of America advertisement, so we looked into it. The house that we are currently living in is on their site (the one around the corner is not - same layout/ same year/ but it has an awesome yard).
The house is in no need of repairs, it was built in 2003, and the previous landlords (not the current one we're with) did upgrades throughout the house. So we know the history of the house, and what is wrong with it (has no RV access driveway, we tore down a fence, just to upright the fence after moving in). This is the best option for us at the current time, as we don't see the honest need to divorce =$800 for $199,000= house that doesn't exist.
We are working with our landlord and a real estate agent (our own) to make this worthwhile for us.
**I'm sorry to the few previous posts from that couple with sores on them from toxic black mold, you have our (myself and husbands) deepest condolences in the situation you were put into. We had a similar incident as you when we went to purchase our FHA home back in 2008, the inspector was paid off for sure! Both the master closet and the front spare bedroom(right smack dab in the center of the room where the lighted ceiling fan was) leaked when it rained- on the very first few hours of rain. We had an old shingle roof (because though you purchase a home with leaks, and the previous grandchildren paint over the leaks (shows no watermarks nor damage then- wondered why air fresheners were in the closets...*hits own head* duh! to cover the smell of the mold. The inspector is suppose to go into attic or basement and onto the roof to completely check everything out! My husband was upset right after we purchased it, the Attic light was burned out, and there was water damage to the wood beams that held the roof on, the roof/beams had somehow became unmounted and was sliding off the walls of the house, and there were cut and live exposed wires in Attic. That year it rained a lot.
If people are corruptible then they will be corrupted faster by money, then they have no regard for human life. Sad but true.
This time around we have become smarter, we checked the Attic first before moving in to the rental, lol
~*~Meleisa~*~
I just signed up with them as an agent, It looks like it be another option I can provide to my clients.
Hey everyone, this is an old thread, but I'd thought I'd see if anyone has any thoughts on this program from the seller's perspective. I'm being told that it's practically a "guaranteed close," (barring any major inspection or HOA issues). What do you all think?
I just signed up with them as an agent as well and have begun doing my own due diligence (hence finding this thread) to be sure any clients I place in this program will be protected. I agree with one member who mentioned having buyers sign something releasing myself as the realtor from any future obligation. As with any "home buying program" there will always be clauses that some buyers may not like or agree to. It's our job as realtors to really educate ourselves before throwing a client to the wolves.
Does anyone know if Home Partners operates in the San Francisco Bay area? I'll be moving there with my wife in October and would be interested in exploring this as an option. If you're a bay area Realtor feel free to reach out.
This business model seems very similar to the Lonnie Scruggs method of mobile home sales. The Scruggs Method was to purchase a mobile home at a below market price, do cosmetic repairs, then rent to a prospective buyer at above market rates. Supposedly the renter could, after a specified term, purchase the mobile home for an agreed upon price.
Due to the economic status of many renters the purchase often never happened. The owner could then evict the renter and do the whole thing again. Under provisions of the Dodd-Frank Act and SAFE this was considered by some legislators as predatory lending. As with wholesaling, there are arguments on both sides concerning the legality and morality of this type of transaction.
do not collect 200 when you pass GO! These people are scammers there is a facebook group for victims who have been taken advantage of. Its really sad to see so many people American dream snatched away because of greed https://www.facebook.com/groups/HomePartnersofAmericaScandalExpose/
@Mitchell Gelman BINGO!
"No home will 'appraise' for more than market value," indeed! (i.e. Even if it were yet in the first to middle stages of an established, "seller's market..." vs. now, when rapidly nearing the END thereof!)
And no company with an 80- 90 page 'agreement' is "looking out, for the client's interests." (Contraire.)
And I'm fairly certain I 'posted' on this thread, previously? (Likely because I mentioned WHO 'founded' this company, and their business contacts, and 'background???') So much for "freedom of speech, BP." Definitely NOT impressed, ST
P.S. OK, Now I'm looking for a copy of this Temple BAR franchise's dba: US Corp. 'legalesed' "agreement." OR, someone should 'post' it online in several places, owned by various interests... in preparation for filing a "Class Action?" (And maybe a second one for the related 'foreclosures,' from 2008- 12?? Afterall, this 'founder' guy... is a real, "piece of work!" ;-)
Now knowing the basic (lease option) numbers range... it's OBVIOUS that if only +/- 20% of these deals CLOSE (since many / most will never 'appraise' for the 'optional' buy price, nor can many tenant buyers bring a 5- 20% check to closing, even if "sentimentally attached!?") that means something like 4/5 are in turn soon LO'd again, and HP owns them!
Then there's the market cycle and continuum "timing..." which 'insiders' like the founder (former Saloman vice chairman, and co- developer of the same "mortgage backed securities" derivatives that caused much of the "robo- signed, toxic debt" baked into the 2007- 12 cake, now worth around $2 billion with his 80 page LO 'agreement') would likely have been capable of "doing the numbers on?" (Or at least his accountants and attorneys in NYC, etc. certainly could have figured- out, over a 5- 10 year trajectory, with a "max closure rate of 25%, and a low of 10%?!") So this "they only charge 5% a year" (when they know very well that despite NAR false claims, it costs between 15- 35% plus to 'resell' via the NAR / MLS, etc. at RETAIL, over 1- 6 months time...) makes no 'logical' business sense, whatsoever... so that then leaves only the: "wash, rinse and repeat,"OPTION!
NO... these (serial) sheisters clearly knew/ know PRECISELY what they are doing... as does any veteran "slumlord," turned LOer! They just do so, hiding behind a near 'bulletproof' contract, in Temple BAR 'legalese...' and layers of LLC, etc. "shell corps," much like their 'bankster' mob bosses. ;-)
Originally posted by @Connor Cushman:
Does anyone know if Home Partners operates in the San Francisco Bay area? I'll be moving there with my wife in October and would be interested in exploring this as an option. If you're a bay area Realtor feel free to reach out.
What part of the bay area, this a big place with drastically different areas/prices.