RentToOwn-HouseFinder.com
will someone explain why the standard lease/option agreement violates the due on sale clause in loans?
Public Comments
- don't think it does, the due on sale clause allows the lender to call in the loan at any time, if you have an option contract, it could be considered a purchase if it exceeds the length of time in your state(around 3yrs), if it's a lease only, this is not in effect.
- Who says it does? I'm a Realtor and investor. I do lease option sales often and this has never been a problem for me. "Due on sale" clauses typically mean the lender reserves the right to call the loan due when a sale of that property is made. Typically that would involve a new owner and a new warranty deed. A lease/option arrangement doesn't become a sale unless the tenant actually exercises his option and buys the property. At that time any existing loans the former owner has would be paid off.
