Posted by Bud Branstetter on December 08, 1999 at 10:19:19:
Rent credits can be against either the purchase price or the down payment. As the seller we prefer them against the sales price. We can adjust the sales price at the beginning. Lenders have a problem with down payment credits. First they like to see them as separate checks. Second, they like to see them above and beyond the FMV of rent for the property.
While the 20% is a normal figure for a conventional down payment, in todays world a decent mortgage broker can work with far less. The T/B lease should be on a yearly basis. Renegotiate for the second year if needed. How long you help him depends somewhat on the master lease and how fast you want your money. At some point the T/B must put up or move on, leaving his option money behind.