Which financing option allows low and moderate-income buyers to lease a home with an option to buy?

Which financing option allows low and moderate-income buyers to lease a home with an option to buy?

• A. Leasehold
• B. Lease-Purchase Mortgage Loan
• C. Insured Mortgage
• D. Junior Mortgage

Answer: (B)

The financing option that enables low and moderate-income buyers to lease a home with an option to buy is the Lease-Purchase Mortgage Loan. This arrangement specifically allows tenants to lease a property for a certain period while also providing them with the right to purchase the home at a predetermined price during or at the end of the lease term. It serves as a viable pathway for individuals who may not currently have the full financial resources to buy a home outright but aspire to do so in the future. Other financing options mentioned do not include this specific lease-to-own arrangement. For instance, a Leasehold refers to the right to use or occupy property but does not inherently offer a purchase option. An Insured Mortgage typically involves loans backed by government insurance, designed to minimize risk for lenders, and does not pertain to leasing or options for buying. A Junior Mortgage is a secondary loan secured against a property, meant to finance additional borrowing, rather than facilitating a lease-to-buy scenario. The Lease-Purchase Mortgage Loan stands out because it effectively bridges the gap between leasing and home ownership, making it particularly helpful for buyers with limited financial means.

The financing option that enables low and moderate-income buyers to lease a home with an option to buy is the Lease-Purchase Mortgage Loan. This arrangement specifically allows tenants to lease a property for a certain period while also providing them with the right to purchase the home at a predetermined price during or at the end of the lease term. It serves as a viable pathway for individuals who may not currently have the full financial resources to buy a home outright but aspire to do so in the future.

Other financing options mentioned do not include this specific lease-to-own arrangement. For instance, a Leasehold refers to the right to use or occupy property but does not inherently offer a purchase option. An Insured Mortgage typically involves loans backed by government insurance, designed to minimize risk for lenders, and does not pertain to leasing or options for buying. A Junior Mortgage is a secondary loan secured against a property, meant to finance additional borrowing, rather than facilitating a lease-to-buy scenario. The Lease-Purchase Mortgage Loan stands out because it effectively bridges the gap between leasing and home ownership, making it particularly helpful for buyers with limited financial means.