You are correct on every part EXCEPT the due on sale. The lender CAN call it due, even though it is not a complete sale. The due on sale is triggered for a transfer of of ownership OR ANY PART OF ownership. Federal law provides a few exceptions, but a lease/option is NOT one of them.
That having been said, it isn’t likely a lender would find out or care.
Posted by Alex-AZ on January 27, 2002 at 09:41:24:
If my understanding of a lease option is correct, the investor is merely leasing the property with the option to purchase it at a later date. In such a case, ownership of the property is not transferring, so the lender can’t call the loan due, is that correct?