WILMINGTON, N.C. (WECT) – A homeownership program has already helped one Wilmington family seal the deal on their dream home — but experts say it’s not a program that everyone can benefit from.
Earlier this year, the Castillos were in the market for a new place to call home.
“We tried to stay in New Jersey but the rent has just gone way up just for a small apartment or anything like that,” said Jefferson Castillo. “We went out to Wilmington and we went downtown and we grabbed some lunch, went to the beach and we had fun. We both looked at each other at the end of the night and were like ‘I think we could move down here in a couple years.’”
The problem was the couple’s financial situation. After pandemic-related hardships, they were newly self-employed. Although their jobs as social media content creators had led to a steady income, they hadn’t been doing so for long enough for mortgage lenders to be willing to work with them.
“After hearing constant no’s because we didn’t have that consistent income, I spoke with our realtor about it, like ‘I’m just letting you know, we need a home but what are our options?”
That’s when realtor Rob Flannigan told the family about Landis.
“Landis is a homeownership company, explains company representative Michaela Haberer. “Basically, a client would apply and if we see a path to homeownership within the next two years, we buy the house in cash and they move in until they’re loan ready.”
Landis will put down cash offers for homes priced between $110,000 and $500,000 and move-in ready. To qualify, applicants have to have a minimum credit score of 550 and a minimum salary of $30,000.
Participants in the program get up to two years to rent from Landis but can buy back the home at any time they feel ready. In the meantime, Landis coaches the participants on how to ready their finances for homeownership while also putting a portion of the rent payments aside for a down payment.
Much like the Castillos, Just for Buyers Realty’s broker in charge Jennifer Reinholt thought it must be too good to be true — until she did some digging.
“The application is free, so really, I mean, why not, to see if that could be an avenue that could help you beat out another offer?” said Reinholt.
There is, however, a small catch.
“The true cost of the program is when the clients purchase it back, it’s three percent above original appraised value,” said Haberer. “If we buy a house in cash for $200,000, when the client buys it back anywhere between the next day and 12 months later, it’s three percent higher than origanal appraised value, making it $206,000.”
That’s not all Reinholt says buyers need to keep in mind. After many families lost their main sources of income due to the pandemic, there is reason for hesitation if you’re not on steady ground financially.
“Make sure you feel very secure in the position you’re in, that if something were to happen, are you going to be one of those, you know, that could lose their main source of income,” said Reinholt. “I think that for me is what could be a little scary is there’s no assurity anymore that the job I have today I’m going to have in six months.”
For the Castillos, the risk was well worth the chance to buy the perfect home for their growing family.
“[Without Landis,] I think we’d still be renting,” said Amirah Castillo. “We couldn’t get a traditional loan, so we’d still be renting and hoping we could find someplace that would take in all the kids that we had with the one on the way and still have our preferences as far as space.”
Copyright 2022 WECT. All rights reserved.