Frequently asked questions

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Figure Home Lease Back

What is Figure Home Lease Back?

The Figure Home Lease Back is a residential sale-leaseback solution allowing homeowners of any age to sell their home to Figure and continue living there by leasing the property back.

How does Figure Home Lease Back work?

Figure works with homeowners to purchase their home and give them a lease to continue living in their house. The homeowner gets cash from the sale (up to 92% of their home equity), a lease that automatically renews*, and none of the responsibilities of owning a house, like property tax payments, HOA fees, or expenses associated with repairs required as a result of normal wear and tear. Renters also have the option to buy back their home later if they decide they want to own it again.

What is the difference between a reverse mortgage and Figure Home Lease Back?

Reverse MortgageFigure Home Lease Back
Access to cashThe typical reverse mortgage offers borrowers 30-60% of their home equity depending on their age.Up to 92% of the home equity.
Age requirementYes. The youngest borrower must be 62 or older. None
Financial responsibilities (Ongoing and future)
  • Property taxes
  • Maintenance and upkeep
  • Repairs
  • HOAs, if applicable
  • Utilities
  • Loan (plus accrued interest) payoff at end of term
  • Rent payments
  • Utilities
  • Renter’s insurance
  • Repairs other than those associated with normal wear and tear
Fees
  • Mortgage insurance (2% of home value)***
  • Origination fees (2% of first $200,000; 1% of amount over $200,000)***
  • Title insurance
  • Flood Certificate
  • Wire Fee
  • Credit report
No fees**
StatusHomeownerTenant (Has option to purchase home)

For whom is Figure Home Lease Back best suited?

While Figure Home Lease Back is generally best suited for homeowners who have accumulated significant equity in their primary residence, there are no minimum home equity requirements for this product. You will, however, need to show an ability to pay rent under the lease.

How is the value of my home determined?

Figure uses a variety of tools to determine the value of your home, including an automated valuation model and independent appraisal. Figure’s valuation takes into account metrics such as recent sales of similar properties, public data records, and historical price trends in the housing market to reach a realistic assessment of your home’s value.

How much money will I receive when I sell my home?

We will make you a purchase offer. You will get all of this money, less any remaining lien balances you may have, any existing obligations, such as private transfer fees and realtor fees incurred by you. All other costs of selling a home are covered by Figure at no cost to you. Here’s an example:

Purchase price:$300,000

Current mortgage balance:$20,000

Net cash proceeds:$280,000

Will Figure pay for realtor fees or private transfer fees I have incurred?

Figure will cover all the costs of the transaction associated with our product when you sell; however, you would be responsible for any existing obligations, such as private transfer fees and realtor fees, that you incurred.

How much rent will I pay?

Rent is based on current market rates. Similar to how an appraiser estimates home values, Figure determines a fair market rental rate by considering local rental properties that have similar characteristics to your home, such as square footage, general condition, and number of bedrooms and bathrooms. Monthly rent payments and the terms of potential increases will be detailed in your lease agreement.

How long are lease terms?

Leases are 1 year in length and will auto-renew if you are current on your rent payments and not otherwise in breach of the lease. You always have the right to opt out of the auto-renewal by providing Figure with written notice 60 days prior to the end of your lease.

What happens at the end of my lease term?

At the end of your lease term, the lease will auto-renew unless you have provided notice to terminate the lease, or you have failed to meet the terms of the lease, such as by failing to make rental payments. We will provide any rent adjustment updates 90 days from the lease renewal date.

Will my rent increase?

Possibly, but rent increases are capped so that you can plan accordingly. Monthly rent is based on the current market rate in your neighborhood. If the fair market rent for your home goes up, your monthly payment could also increase for the next one-year term of your lease. We will provide any rent adjustment updates 90 days before the lease renewal date. The timing of potential rent increases will be outlined in your lease agreement; increases will never exceed 5 percent over the prior year’s rent.

Can I buy back my home?

Yes, if you stay current with your rent payments, you will always have the option to buy your home back. The buyback price will be the current appraised value or the price at which Figure purchased your home, whichever is greater. There may be additional transaction fees associated with the closing process that you will be responsible to pay.

How can I use the cash from the sale of my home?

The money you receive from the sale of your home can be used to fund your retirement, consolidate debt, make another investment, cover personal expenses or anything else. It’s your choice. You may wish to consult with a financial advisor to determine your long term retirement needs and have a plan in place to make your lump sum of cash last.

Are there tax implications of the sale?

We encourage you to speak with a tax professional who can provide advice specific to your situation. If you have a capital gain from the sale of your main home, you may qualify to exclude up to $250,000 of that gain from your income, or up to $500,000 of that gain if you file a joint return with your spouse. There are other things, however, that can reduce your cost basis; a tax professional can help guide you.

What expenses will I have to pay, and am I responsible for upkeep with Figure Home Lease Back?

One of the many benefits of Figure Home Lease Back is that as a tenant you will no longer be responsible for paying property taxes or homeowners insurance or handling repairs required as a result of normal wear and tear or maintenance on the property. You will continue to to be responsible for your utilities, however, and Figure requires that you maintain renter’s insurance. In addition, you would be responsible for keeping the interior and exterior of the home clean and expenses associated with repairs required to maintain your home, other than as a result of normal wear and tear, including, but not limited to, repairs for any condition caused by you or your guests. All of these details will be clearly outlined in lease documents.

Where is Figure Home Lease Back available?

Figure Home Lease Back is currently available in Atlanta, GA; Cincinnati, OH; Cleveland, OH; Dallas, TX; Houston,TX; Jacksonville, FL; Philadelphia, PA; Phoenix, AZ; Pittsburgh, PA; Reno, NV; San Antonio, TX; and Tampa, FL, and coming soon to more cities. Stay tuned by signing up for our waitlist!

* Residents can stay for as long as they like as long as their rent payments are current and there are no other breaches of the lease terms. We require a minimum of a 1-year lease.

** Fees apply in the event the resident exercises their right to buy back the home.

*** https://reverse.org/reverse-mortgage-fees/