What is the Dream America?
Dream America is a rent-to-own program that makes own affordability achievable for some borrowers who may not have qualified for a traditional mortgage.
With the Dream America Program, aspiring homeowners select any property for sale in their town within an allowed budget. The home you choose is then purchased by Dream America and leased to you until you qualify for a mortgage.
Dream America does not get involved in the home selection process. The process of choosing a home is almost identical to getting a mortgage through traditional means. The main difference is that once you’ve found your dream home, Dream America will purchase it and lease it back to you for12 months.
During your lease, Dream America will develop a path to homeownership for customers who are currently renting to help them purchase the homes that they are living in. You can terminate the lease without penalty as soon as you qualify for a mortgage.
How Does the Dream America Rent-To-Own Program Work?
- Get prequalified to see if you qualify for Dream America’s rent-to-own program. They will do a soft credit check.
- Provide the Dream Team with supporting income and savings papers.
- You can start shopping for a home, once have been preapproved to purchase a home
- Once accepted, choose any home for sale in your neighborhood that suits your budget that is not more than 15 years old or has been updated within the last 15 years.
- Dream America will make an offer on the home that you have chosen to be your Dream home. If the offer is accepted, Dream America will order an inspection. If repairs are needed, Dream America will ask the seller to address the repairs.
- If all the parties agree, Dream America will require an earnest money deposit from you, this is around 1% of the sales price. Additional paperwork will be completed.
- Close on the home and move in.
- Buy back the home within 12 months from Dream America.
- Renew your lease after 12 months of leasing, but there will be a surcharge of 5% on the rent and the value of the home.
What is the Credit Score Limit for Dream America Homes?
The minimum credit score to qualify through Dream America’s rent-to-own program is 500.
What are the Minimum Requirement to Qualify for the Dream America Program?
- Must be United States Citizens or Permanent Residents
- 12-month track record of paying rent on time
- Debt to income ratio including Dream rent below 50%
- Household pre-tax income of $4,000/month (applicant + co-applicant, if any)
- Minimum 500 FICO Score.
- 5,000 – $10,000 or more available from savings, 401k, or gift.
Which Homes Are Eligible for Dream America?
Dream America limits its purchase to homes that are less than 15 years old or have been remodeled within the past 15 years. Generally, they would prefer that homes are newer or in good condition. That means that the home will not need expensive repairs. Renters are responsible for general repairs and maintaining the home.
Dream America will purchase an extended warranty to cover the major systems of the home, such as HVAC, etc.
Type of Homes:
- Single-family homes or Townhomes
- Condos and modular homes are not eligible
- For the Metro Atlanta market, Dream America limits homes to between $150,000 and $400,000.
Age Limit of Homes
- Homes built or renovated in the last 15 years
Who is responsible for Repairs During the Lease?
The renter will be responsible for all repairs. This is part of the reason they only invest in newer homes (homes that are within 15 years of age or updated within that time).
Who is Dream America’s Rent to Own Program For?
In closing, Dream America’s rent-to-own program is perfect for folks who are on the verge of qualifying for a property through a standard mortgage company but fall just short.
This program gives aspiring homeowners time to get their feet wet while getting their foot in the door of homeownership.