This is a situation similar to the lease option,
but in this case the tenant would not have an option to buy back the property.
The buyer would purchase the home from the home owner for an agreed-upon price,
and then create a lease for the seller to rent back the property.
The purchase arrangement may vary as the seller may purchase the home subject to,
by loan assumption, for cash, or by some other means.
This option is often given to a person who is facing foreclosure but wishes to remain in their home.
Upon expiration of the lease, the agreement could become a lease option,
giving the tenant an opportunity to buy back the home, or the tenant would be able purchase a new home.
This can be a good option for a person trying to save his/her credit.
John Doe has owned his home for seven years.
However in the past few months, he has had trouble making his mortgage payment
and now the bank has threatened to foreclose.
John’s home is in a good neighborhood with good schools and is located close to his job.
He does not want to move, but also does not want to lose his home and ruin his credit.
He may be able to work out an arrangement for a buyer to take over his payment and allow him to stay in the home by creating a lease.
John could then rent his home from the buyer for a couple of years until he can get a loan for a new home.