
Well, we recently got caught in another regulation change on our way to closing. Are you aware that there are new work for equity requirements? Do you even know what that means?
We do a lot of lease to own contracts for selling. We buy homes and put tenants under lease to own because they’re unable to get traditional financing. We work on their credit and give work for equity credits to help them raise their needed down payment. That’s been working beautifully for years. As with everything else in the 2010 finance regulations, new requirements!
1. For existing construction, which is generally our area: only repairs or improvements listed on the appraisal are eligible for work for equity. Any work or materials not included on the appraisal are not eligible.
OK, so here’s the problem. What appraisal? This means that, before I put a tenant in with work for equity opportunities, the lender wants me to get an appraiser to look at the work they will be doing and set a price for it. Ugh.
Then, the appraiser must look at it after the work is done to confirm the work and the value. Ugh.




