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If you’ve been exploring alternative financing to a mortgage, you might be wondering, what is a land contract? A land contract is a real estate transaction where the buyer and seller agree to an installment loan without the services of a bank, but with some recorded interest of the buyer in the property. The seller retains the title until the purchase amount is paid in full.

Land contracts are an alternative financing tool for buying property. If you’re up against a situation where your finances or your desired property don’t qualify for a traditional mortgage, you’ll want to take a closer look at whether or not a land contract makes sense. Land contracts, however, do have their limits.

In this article, we cover:

•   What exactly is a land contract and how does a land contract work?

•   Examples of how land contracts work

•   How a land contract compares with a mortgage

•   How to turn a land contract into a traditional mortgage

•   Pros and cons of a land contract

•   Alternatives to land contract financing

What Is a Land Contract?

A land contract is a seller-financed real estate contract where the buyer makes installment payments until the full purchase price is paid. Once the buyer has paid in full, then the seller transfers the deed to the buyer. It’s comparable to a lease-to-own arrangement and is also known as a Installment Sales Contract, Agreement to Convey, and Agreement for Purchase and Sale. A land contract is not to be confused with a land loan, also known as a lot loan, which is used to purchase a plot of land. Nor is it the same as a real estate options contract, in which a buyer pays a premium to have the option to purchase a property during a specific window of time.

Land contracts are incredibly flexible, with the terms decided on by the buyer and seller. They’re often used when a buyer is unable to qualify for a traditional mortgage, the property does not meet lender requirements for a mortgage, or when the purchaser is buying a house from a family member.

Land contracts are usually set up with owner financing so the arrangement to pay the seller is temporary. It’s common to see a balloon payment at the end, with the expectation that the buyer will obtain traditional financing from other sources or pay off the loan entirely.

Land contracts can be risky for the buyer, and past uses of land contracts have been predatory. This is because the seller holds the title while the buyer is responsible for paying for the maintenance and repairs of the property. If the buyer gets behind on payments, the seller can demand the buyer vacate the property. If you are considering a land contract, it’s wise to also look into first-time homebuyer programs which might be another way to make ownership possible.

How Does a Land Contract Work?

With a land contract, the buyer receives what is called “equitable title” for the property. The buyer takes on many of the responsibilities of a homeowner, including paying for the upkeep and repairs of the property.

The city of Detroit, where there are more land contracts than traditional home mortgage loans, outlines four parts of the land contract.

Step 1: Research the home and review the contract

Some things you may want to look for before entering into a land contract include:

Ownership. Look for the name of the owner listed on official records (usually at your county clerk’s office). Prospective buyers have been duped into signing contracts with people who are not the property owners. (Getting a title report can help provide clarity.).

Liens and debts. Does the owner have any liens recorded against the property? Again, it’s likely you’ll need to check the county recorder’s office for this information.

Sales price. Is the sales price in line with what other properties of a similar size, age, and condition?

Condition of the home. Take into account what repairs need to be made and how much it will cost.

Review the contract: What deposit and installment amounts is the buyer expected to pay the seller? What are the other costs the buyer is responsible for? Are there any red flags in the language of the contract? It would be wise to hire a real estate attorney to review a land contract before signing.

Step 2: Sign the contract

Buyers can expect to bring payment and identification to signing. Forms you may be expected to fill out include: land contract, memorandum of land contract, property transfer affidavit, and principal residence exemption. Buyers will also want to read any disclosures the seller is required to provide, such as a lead disclosure.

Step 3: File contracts and uphold terms of the agreement

Be sure that the land contract is recorded. Obtain insurance and change utilities over to your name. Make sure you pay property taxes and make your scheduled installment payments.

Step 4: Exit the land contract

When the full amount is paid off — either with regular payments or by obtaining another mortgage — buyers will receive the deed to the property. Be sure to have the deed officially recorded and file a property transfer affidavit.

Land Contract Examples

Some examples of situations that might make a land contract a sensible alternative include:

•   Buyer credit scores. Buyers with poor or no credit can sometimes find a path to homeownership through a land contract.

•   Condition of the home. Homes that won’t pass inspection or meet lending guidelines will have trouble being financed with a traditional mortgage.

•   Value of the home. Low-value homes may not be worth enough to qualify for a mortgage.

•   Banks may view a community as high-risk. Some banks may not offer mortgages based on the location of the property.

Recommended: How to Make an Offer on a House

Land Contract vs Mortgage: How Do They Compare?

When you’re comparing a land contract with a mortgage, the key difference is who has ownership of the property. When a buyer secures a mortgage, the title of the property is transferred into their name. With a land contract, the title isn’t transferred to the buyer’s name until the purchase price is paid in full. There are other key differences, as outlined in the following comparison chart.

	Land Contract	Mortgage
How the title is handled	Title conveyed when paid in full	Title conveyed when buyer secures a mortgage and closes
Foreclosure procedures	Seller can take back the property without going through the foreclosure process	Has legal foreclosure protections
How the buyer pays for the property	Buyer pays the seller directly	Buyer pays a lender
Who is involved in the contract	Contract made between buyer and seller	Contract involves a third-party lender
Closing costs	Avoids many closing costs	Has many closing costs
Who’s responsible for upkeep of the property?	Buyer	Buyer

How to Turn a Land Contract Into a Traditional Mortgage

A land contract ends when it is paid in full. However, buyers don’t need to have paid the full amount to exit the land contract. Ideally, after a few years, the buyer is able to obtain a mortgage, pay off the land contract, and secure the title to the property. When the buyer pays on their own mortgage instead of paying a seller directly, they’ll have actual ownership and more legal protections. These are the steps buyers can follow to get a traditional mortgage following a land contract.

1.    Improve your credit score if it is on the lower end

2.    Build up your cash reserves and/or equity in the property

3.    Get prequalified for a mortgage

4.    Choose a lender, provide them with the land contract and installment history, and close on a loan

5.    Pay off the land contract and receive the deed.

Pros and Cons of Land Contracts

Land contracts can be complicated, so it’s important to evaluate all the pros and cons of how it’s going to work.

Pros

•   Land contracts are much more flexible than traditional mortgages

•   Land contracts avoid large closing costs.

•   Buyers can purchase properties that lenders are unwilling to underwrite.

•   Fixer-uppers and low-priced homes can fall into this category.

•   Buyers with low or no credit can purchase property with a land contract.

Cons

•   Buyers can be taken advantage of by sellers in a land contract.

•   The buyer has no control over the seller’s title.

•   Situations, such as the death of the seller, can upend a land contract before title is conveyed.

•   Buyers usually have to pay a higher interest rate on a shorter term, which could mean much higher payments than a traditional mortgage.

•   Buyers do not have the legal protections of the foreclosure process and may lose all principal and installment payments made if they fail to meet the terms of the contract.

•   The buyer may not be able to transfer the contract to another buyer should they change their mind and wish to exit the agreement.

Alternatives to a Land Contract

If you’re looking at buying property with a land contract, you’ve probably also come across these alternatives:

Owner financing. A land contract is a type of owner financing, but an owner can also help a buyer finance a home outright. With a land contract, the seller has more power to take back the property should the buyer miss payments. With owner financing, there may be a promissory note and mortgage recorded. (Owner financing is also known as a purchase-money mortgage.)

Lease with the option to purchase. With this type of contract, the buyer acts more like a renter and the seller as landlord. The buyer pays a fee to have the option to buy the property at the end of the lease period at a predetermined price.

Recommended: Can You Put an Offer on a Contingent House

The Takeaway

Land contracts have their place, but they also have limitations. When you’re ready to switch over to a traditional mortgage, you can have full interest in the property, meaning, the property is titled in your name and there are more legal protections on your side when it comes to foreclosure.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

What is the main disadvantage of a land contract to the seller?

Sellers may need to take on the role of landlord since the financing to the buyer bypasses a lender. They also delay getting paid in full for the property.

What is the interest rate on a land contract in Michigan?

As per state law, the maximum interest rate that can be charged on a land contract in Michigan is 11%.

Does a land contract have to be recorded in Indiana?

To be valid in Indiana, a land contract must be recorded with the county recorder. If it’s not recorded, the contract isn’t enforceable and disputes are difficult to resolve in court.

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Photo credit: iStock/skynesher

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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If you like paying fewer property taxes, you’ll like the Homestead Exemption. A Homestead Exemption, sometimes also called a primary residential exemption, is where you only pay property taxes on a portion of your home’s market value. Eligibility for the Homestead Exemption is usually dependent on the home being used as your primary residence.

To understand more about what the Homestead Exemption is and how it could affect your taxes, we’re covering the bases, including what a homestead exemption is and how it works, automatic vs. declared homestead exemptions, who qualifies for a homestead exemption, how to file for a homestead exemption, and which states have homestead exemptions.

By the end, you should have a better idea of how to reduce your taxes with the homestead exemption if it isn’t already applied to your property.

What Is Homestead Exemption?

To clarify, there are two different scenarios that are both described as the Homestead Exemption.

1.    A homestead exemption can refer to a reduction in taxes offered when the property is used as a primary residence.

2.    A homestead exemption can also describe the amount of equity in a home legally protected from creditor liens. Read up on homestead exemption rules by state if you want to better understand this protection.

Both require the owner to live in the property as their principal residence, but they differ from there. The first applies to taxes and the second protects a homeowner’s equity from creditors during adverse life events. The first is the more common application and is the focus of this article.

How Does a Homestead Exemption Work?

At a very basic level, how a homestead exemption works goes something like this:

1.    You live in the home as your primary residence.

2.    Apply for the homestead exemption (if your taxing entity doesn’t automatically apply it). Be sure to include all required documents.

3.    Receive a discount on your property taxes as determined by your taxing entity. The discount can be a percentage or a set dollar amount. If you have a home mortgage loan on your primary residence, remember that if your property taxes are included in mortgage payments, your mortgage servicer will pay this for you from your escrow.

4.    Continue receiving the Homestead Exemption. It renews automatically for most taxing entities.

Recommended: Best States to Retire in for Taxes

Automatic Homestead vs Declared Homestead

Automatic vs. declared homestead refer to two different things.

•   Automatic. Many taxing entities may automatically apply the Homestead tax exemption when you purchase the home. If you do need to apply for the Homestead Exemption, you usually only need to do it once. It’s typically renewed annually after your first application.

•   Declared. A Declaration of Homestead is a legal document homeowners can file with their taxing entity to protect their home from creditors.

Who Qualifies for a Homestead Exemption?

Generally, homeowners who live in the home as their principal residence may qualify for the Homestead Exemption. Corporations or other entities that own properties do not qualify for the Homestead Exemption. If you have helped a family member purchase a home through a family opportunity mortgage, talk with a tax preparer about whether this property is eligible for the homestead exemption given that it is technically considered owner-occupied.

Other requirements may include:

•   Have all your vehicles registered in the county where you want a Homestead Exemption

•   Not have a Homestead Exemption for any other property

•   Send in the Homestead Exemption application by the deadline

Examples of a Homestead Exemption

The amount of the exemption varies depending on your taxing entity. Here are a couple of examples of how the homestead exemption works in Texas and Florida.

•   In Texas, you may qualify for a $40,000 exemption. If your home is valued at $300,000 for tax purposes, you’ll only pay taxes on $260,000.

•   In Florida, you can receive up to a $50,000 exemption. If your home is valued at $400,000 for tax purposes and you qualify for the homestead exemption, you’ll only be taxed on $350,000 of market value.

Limitations of the Homestead Exemption

You cannot have a homestead exemption on more than one property. Also, if you move and plan on keeping the home as a rental property, it won’t qualify for the exemption. The homeowner bears the responsibility for notifying the taxing entity and it’s possible that the taxing entity can place a Homestead Tax Lien on your home.

How to File a Homestead Exemption

In many cases, you’ll be sent paperwork from your local taxing entity for the homestead exemption (usually your county assessor). If they do not, you can find the forms for filing for a homestead exemption on your local tax assessor’s website. Information that you can expect to provide includes:

•   Name

•   Property address

•   Identification, such as a driver’s license

•   Social Security number

•   Car registration (this is to help prove residency)

Recommended: First-Time Homebuyer Programs

States With Homestead Tax Exemptions

Most states offer some form of homestead exemption or credit. Only New Jersey and Pennsylvania do not offer an exemption at all.

Pros and Cons of Homestead Exemption

If you’re able to qualify for the homestead exemption, it will reduce the tax on your property and may help make your home more affordable. This is a huge benefit and makes the pros and cons of the homestead exemption a very short list.

Pros

•   Reduces the amount of property taxes paid

Cons

•   You may need to file paperwork by a deadline

•   Second homes don’t qualify for the homestead exemption

Recommended: Pros and Cons of Buying a Starter Home

The Takeaway

The tax break you get with the Homestead Exemption could be substantial. If you qualify for it, make sure that you’re getting it. Be aware of when you need to file paperwork (if at all), and what you need to include with your application to ensure you’re paying the proper property tax rate for those living in it as their primary residence.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

How much is the homestead tax credit in Iowa?

The homestead tax credit for Iowa is equal to the tax levy on the first $4,850 of value.

How much does homestead exemption save in Georgia?

The amount saved in Georgia for the homestead exemption varies by county. The city of Decatur has an exemption amount of 50% while Fulton County and Atlanta offers $30,000 off assessed value on the County taxes, $2,000 off on the school taxes, and, if the resident is in the City of Atlanta, an additional $30,000 exemption for city operations, parks, and schools.

How does the Indiana homestead exemption work?

Homeowners in Indiana can qualify for a deduction of 60% of the property’s assessed value or a maximum of $45,000, whichever is less.

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Photo credit: iStock/fizkes

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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When you miss qualifying for a mortgage, you may be wondering if you have any options for buying a home. One avenue you might be researching is how does lease-to-own work?

Lease-to-own, also known as rent-to-own, is a way to begin the process of purchasing a property by renting it first. The main benefit of lease-to-own is that it allows the tenant time to build up credit and savings. It also grants the tenant time to see if the area and neighborhood are a good fit for their needs. We’re here to break it all down for you so you can decide if a lease-to-own agreement makes sense for your situation.

What Is Lease-to-Own?

A lease-to-own is an agreement between a landlord and a tenant that gives the tenant the right to buy the property after a specified amount of time. A portion of the rent paid may accumulate and be used for a down payment in the purchase transaction (the portion of rent held for the buyer is also known as “rent credit”).

Buyers may want to learn more about what is a lease-to-own agreement for a number of reasons, such as an inability to qualify for a traditional mortgage. The lease period allows the buyer to:

•   Build their credit

•   Save for a larger down payment

•   Increase their income

•   Try out the neighborhood

How Does Lease-to-Own Work?

The first step in entering into a lease-to-own agreement is to find a lease-to-own property. Since a lease-to-own agreement is a contract directly between a buyer and a seller, buyers need to find sellers who are willing to enter this type of arrangement. It can be difficult, since most sellers prefer a conventional sales arrangement. With lease-to-own, the seller continues to carry the mortgage while collecting rent from the buyer. (After a period of time, the buyer will have the option to purchase and will seek a home mortgage loan of their own to help pay for the property.)

To find a lease-to-own home, try one of these ideas:

•   Use a real estate agent. Some agents specialize in rent-to-own programs and may be able to help you negotiate a lease-to-own contract with a seller or point you in the direction of a local program.

•   Search a database. Some websites list homes that may be available for lease-to-own. You may be able to find these homes on websites such as HomeFinder.com, ZeroDown.com, or Renttoownlabs.com.

•   Find a lease-to-own program. Some homes may be offered as part of a program similar to first-time homebuyer programs. In Home Partners of America or Divvy, for example, you find a home, the organization buys it, and then you sign a one-year lease (which can be renewed). At the end of the lease, the buyer agrees to purchase the property.

•   Look for “For Sale By Owner” yard signs or online advertisements. A lease-to-own agreement may be worked out directly with the owner of the property.

Once you’ve found a property, you’ll need to ask for documentation that the seller truly owns the property and is up to date on property taxes and mortgage payments. Sometimes would-be buyers enter an agreement only to find that the house is in foreclosure.

If everything checks out, the buyer and the landlord will sign a Lease Purchase Agreement. A Lease Purchase Agreement is more complex than either a lease or a real estate purchase contract — it’s a contract where the lease agreement is tied to a purchase contract. What that means is once the lease period ends, the buyer agrees to purchase the property for a price set at the beginning of the contract. (Some deals are Lease Option Agreements, in which the buyer has the option to purchase the property but also has the flexibility to walk away; you can hire a real estate attorney to help you create the contract that best suits your needs.)

The buyer puts down a deposit, which can be used to secure the option to purchase the property at a later date.

Later, after the lease period comes to a close, the Purchase Agreement is executed. The buyer must first find financing to buy the property at the previously agreed-upon price. It may also be possible to renew the lease for another year if the buyer doesn’t have the credit or down payment requirements ready.

In the purchase contract, there’s typically a fair amount of rent credit that the buyer can use toward the down payment on the home if they’re able to move forward with financing.

Recommended: What Is a Duplex? Features, Pros and Cons

What Is a Lease Purchase Agreement?

Let’s dig deeper into what a lease-purchase agreement actually is. A Lease Purchase Agreement is a real estate contract consisting of two parts: a lease agreement and a purchase contract. In a Lease Purchase Agreement, a buyer leases a property with the intent of purchasing it down the road. At the end of the lease agreement, the buyer must secure funds, usually with a mortgage, to purchase the property.

Lease-to-own agreements are structured contracts that include the following:

•   Names of parties

•   Beginning and end date

•   Option money fee

•   Amount of purchase price

•   Amount of rent credit (25%-30% of the rent is typical)

•   Exclusions/inclusions of personal property (such as a washer and dryer)

Lease Purchase Agreements require the buyer to purchase the property in the future. A breach of one agreement voids the other. In other words, if the buyer breaks the lease agreement (such as by missing rent payments), they may not be able to purchase the property.

Recommended: Is Investing in Single-Family Homes a Good Idea?

How to Structure a Lease Purchase Agreement

Since a Lease Purchase Agreement is complicated, it needs to be structured to delineate terms and responsibilities clearly. Some examples include:

•   Determine dates and length of contract. A Lease Purchase Agreement should have clear beginning and end dates and should spell out what should happen at the end of the lease agreement. Some experts recommended a year or less.

•   List what the option fee is. The Lease Purchase Agreement will clearly disclose what the fee, if any, is for entering into the Lease Purchase Agreement.

•   Determine how the rental agreement will work. You’ll have a lease contract that looks much like any other lease agreement when you’re a renter. Your landlord, the seller, may require a deposit, for example, and have guidelines for how the property is to be used. If the property is a condo, there may be bylaws that govern whether you can be in a lease-to-own agreement with the owner. There could also be restrictions on whether you can rent out an extra room while you are a tenant, or whether you can use the property as an Airbnb.

•   Set the future purchase price. A Lease Purchase Agreement will include the home’s future purchase price. Properties can appreciate and renters may want to be sure they’re not going to pay a price that increases every year. Since you are locking in a price, it would be wise to have a home inspection just as you would a home you might purchase outright. After all, if the house has a serious flaw, that could be costly to repair and could affect its value — and in some agreements, the leaseholder is responsible for upkeep.

•   Decide on how much of the rent will go towards the purchase price. This is negotiated between the buyer and seller. It is also known as “rent credit.” Sellers should be wary of allowing too much rent credit as this could allow legal issues to creep in.

•   Clarify roles on home upkeep. In a lease-to-own situation, it’s less clear what party is responsible for maintenance and repairs. Be sure to spell this out in the contract before you sign. Tenants planning to become owners should be wary of making improvements that could become the property of the landlord.

•   Seller should continue paying taxes and insurance. As the seller is still the owner, they should be responsible for taxes and insurance.

Pros and Cons Of a Lease Purchase Agreement

There are some pros and cons to consider if you’re looking at a Lease Purchase Agreement.

Pros

•   Provides a path to homeownership for buyers who might not qualify for a mortgage or have a down payment

•   Locks in the purchase price with a contract

•   Allows the buyer time to build up credit

•   Gives a buyer time to increase income

•   Helps buyers save for a down payment

•   Makes it possible for the buyer to “test out” the neighborhood

•   Ability to earn rent credit or rent equity to go toward the down payment

Cons

•   Buyer may have higher monthly rent or upfront fees

•   Buyer could lose their deposit, option fee, and rent equity if the purchase doesn’t work out

•   Buyer may not qualify for a mortgage when the contract is up

•   House could be in bad shape

•   Seller could be a scammer who doesn’t own the home, is behind on taxes, doesn’t keep the home in good repair, or is in danger of being foreclosed on

The Takeaway

For a lease-to-own situation to make sense, you’ll want to look at the fine print. Consider the fees, interest rate, terms, rental contract, and property condition. If you need to get into a house ASAP and don’t have the right credit score or down payment, then a lease-to-own agreement might make sense. If the terms of a lease-to-own contract are not favorable enough for your situation, see what it takes to get back on track towards qualifying for a mortgage.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

Is it a good idea to lease-to-own?

Whether or not a lease-to-own program is worth it is highly dependent on an individual’s situation. It’s a great idea for those who want to build up their credit, need time to save more money for a down payment, or want to see if the area is really one they want to live in, but you’ll want to do your research on the property and work with an attorney to ensure your rights are protected in the agreement.

What is the downside to lease-to-own?

If the lease-to-own arrangement doesn’t work out, or if the property owner fails to pay property taxes or make their mortgage payments, you may risk losing your deposit, down payment, and any equity you’ve earned with your rental payments.

What is the difference between lease-to-own and lease?

With lease-to-own programs, the renter may have the obligation (or an option) to purchase the property at the end of the contract. Also, it’s common for part of the money you pay in rent to accumulate toward your purchase price. None of this applies with a standard lease agreement.

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Photo credit: iStock/PeopleImages

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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