What's Hot: Total Wine Coming To Friendship Heights | 256-Unit Project Proposed to Replace Rosslyn Buildings Moves Forward
How DC's Rent-to-Buy Condo Development Works
✉️ Want to forward this article? Click here.
Last week, UrbanTurf looked at how rent-to-buy scenarios are making a return to the housing market in the current high interest rate environment. Today, we take a look at how a new condo development in DC is utilizing this strategy.
The Stella, an 18-unit condo project in Petworth, is offering a lease-to-own program called "Pathway to Homeownership" on its remaining homes. Here is how it works for a two-bedroom unit:
story continues below
loading...story continues above
The purchaser and seller come to terms on a sales price of $480,000 for the condo. They agree on a rent amount of $3,400 per month with a lease duration of 12 months. Rent payments are made directly to the title company, and 70% of the monthly rent ($2,380) is held in escrow for the duration of the lease. The remaining 30% ($1,020) is used to cover operational expenses such as condo fees, property taxes, utilities, etc.
At the end of the 12-month lease, the purchaser/renter can elect to move forward to settlement and complete the purchase using the balance of funds held in the escrow account ($28,560) towards their down payment, closing costs, or other settlement costs. Otherwise, the purchaser/renter releases the amount held in escrow as a final rent payment and move-out as they would in a traditional lease.
"Theoretically a person could sign up with this program and end up with 6% of a down payment, just by paying rent for a year," Robbie Cook of McWilliams|Ballard said. "Since many loan options only require 3% or 5% down, this is more than enough to get someone into a home they then own."
If there is a trend or idea that want UrbanTurf to research and cover, shoot us an email at editor(at)urbanturf.com.
See other articles related to: McWilliams | Ballard, rent-to-buy, rent-to-own
This article originally published at https://dc.urbanturf.com/articles/blog/how_dcs_rent-to-buy_condo_development_works/20284.
Most Popular... This Week • Last 30 Days • Ever
One of the critical factors in determining whether refinancing is a wise decision is ... read »
The one-of-a-kind residence was built out of two expansive classrooms, an office, two... read »
As the redevelopment of the Mazza Gallerie mall in Friendship Heights heads towards c... read »
As we head towards the end of the year, UrbanTurf is wrapping up its coverage of larg... read »
Designed by visionary Travis Price Architects, 3623 R Street NW is a light-filled mas... read »
- What Is The Best Spread To Refinance Your Mortgage?
- 13 Foot Ceilings, 5,800 Square Feet in a Historic Schoolhouse: A Rare DC Loft Hits the Market
- Total Wine Coming To Friendship Heights
- The 6 Large Developments on the Boards From Anacostia to the Bridge District
- A Rare & Striking Modern Home in the Heart of Georgetown Hits the Market
DC Real Estate Guides
Short guides to navigating the DC-area real estate market
We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Start browsing below!
First-Timer Primers
Intro guides for first-time home buyers
Unique Spaces
Awesome and unusual real estate from across the DC Metro