I agree with the first comment from Ralph.
You have not provided us with enough information to do anything but speculate about your position. You need to speak with a mortgage professional first to see if your are qualified to obtain a mortgage and for how much. Then you need an attorney to help preserve any legal rights you may have under the option.
If you don't qualify for a sufficient mortgage it is time to move on since the bank will not want to be your landlord.

Allen Bauman
Century21 Yve R. E.
Licensed R. E. Agent
NYS Certified Residential Appraiser
allen.bauman@gmail.com
516-791-3846

Provided you can reach an agreement with the current owner-- If you are interested in purchasing/renting the property and have the finances and have consulted with a mortgage professional, consider speaking with an attorney specializing in real estate for related paperwork.

The rent-to-buy option can be exercised only with the owner of the home. Using the funds credited to you under such an agreement has to also meet lender requirements (e.g., specific terms in written lease, only portion of rent above market value is allowed) so more often than not it would have been better to simply put the money in a savings account. If you're not planning on financing then whatever you and the landlord agree to would be just fine, otherwise your agreement is only as good as your lender allows.

If the home is really foreclosed then your former landlord no longer owns it - you'll need to negotiate any rent with the new owner, the bank that held your former landlord's mortgage. If the bank agrees to this at all this would be short term at best because, as the others have pointed out, the bank wants to sell the home and not be a landlord.

Since you wanted to buy, your best option is to speak with a mortgage professional who can do business where you're looking to purchase (I'm able to finance in all 50 states.) Depending on the area and circumstances you may qualify for a 0% to 3.5% down payment and the seller may contribute toward your closing costs.

If you really want to continue to rent rather than purchase right now I would suggest looking for a different place right now.

I'm sorry if that's not what you wanted to hear. It's unfortunate that your plans had changed due to your landlord's situation but let's move on and see what works best for you now.

I happen to agree w/Don that the bank will not be interested in becoming a landlord however if you were able to get pre-approved for an FHA mortgage then the bank might suddenly become interested in selling you the home. Renting w/an option to buy is usually a long term strategy for tenants with poor credit and landlords with homes that can't be sold for a profit. Your best strategy is to become a qualified buyer. If you need assistance with that you can contact me.

Bethany Marten
Exclusive Buyer's Broker/Mortgage Broker
Home Buyers' Resource Center/Mortgage 1,2,3
514 Merrick Rd
Baldwin, NY 11510
516-223-5095

Won't happen. Banks aren't in the business of being landlords. They certainly aren't in the business of creative financing. At best, you may have some protection regarding staying in the property for a period after the foreclosure.

However, I understand where you're coming from. A strategy that might work is for an investor to buy the property, then rent it to you as a lease-option. The numbers have to work for the investor. He/she will have to have monthly payments low enough to cover either the mortgage payments or to provide a reasonable return on investment . . . so your lease-option payments will have to be high enough to cover that. But you're going to have to get a third party involved to buy the property and to lease-option it to you.

Hope that helps.

I don't know all the details of your situation but it doesn't sound right. Has the house you're living in already changed ownership to the bank? Or is it merely in the preforeclosure stage and the owner you have the rent with option to buy agreement still owns the property? I would highly recommend speaking to your attorney or getting one as soon as possible. Good luck.

Ralph Windschuh
Certified Buyer Representative
Senior Real Estate Specialist
Associate Broker
Century 21 Princeton Properties.
631-467-0009
rwindschuh@c21princetonproperties.com