Earlier this month Fannie Mae announced the release fo their “Deed for Lease program.
If an owner cannot afford to pay their Fannie Mae backed mortgage, they can deed the property to Fannie Mae and rent it back at market rate. The homeowner can obtain a lease up to 12 months and either sign a new lease or go month to month after the initial lease expires. 
All in all, this isn’t a bad idea. This is a good alternative for homeowners who do not want to be kicked out of their house if they’re on the verge of foreclosure. However, it isn’t a permanent solution. Fannie Mae is not in the property management business. They will sell the property as soon as they can, which means the homeowner should be prepared to move when the initial lease is up.
For homeowners who have had extremely bad credit hits and will not be able to buy a home for several years (such as large liens or a recent bankruptcy), this program should only be used to buy time since Fannie Mae will be looking to obtain a buyer later. For homeowners who have only had a few late payments or a bankruptcy at least a year old, this could be a perfect solution. Homeowners could potentially use this as a “Lease-Option-to-Own” program on their own house. They rent the house at market rent rates and re-establish their credit. If they are capable of qualifying for a home purchase by the time the lease is up, they can try to buy the house back from Fannie Mae. If the market price for the home is less than what they previously owed, they may even end up owing less on the house than they did when they were the original owner.
It also gives Fannie Mae time to prepare the house for sale and keep it from going to the foreclosure auction. This will keep the house from selling for below market price and in turn help boost the real estate market from further declines.
Any homeowner who does not obtain a loan modification should consider this option if it’s available and if they can qualify for a purchase loan by the end of the lease. You will want to work closely with a mortgage consultant and draw a plan to save for a down payment (if necessary) and build credit during the lease so you’ll qualify, just like consumers who choose to do a lease-option-to-own.
