What is a Deed-for-Lease?

support for renters


Fannie Mae’s Deed-for-Lease Program (D4L), allows qualified borrowers (or their tenants) to execute a lease of up to 12 months in conjunction with their deed-in-lieu of foreclosure, allowing them to remain in their home as a renter. Borrowers interested in exploring this option should discuss it with their mortgage servicer.

To qualify both the property and borrower (or tenant of the borrower) must meet certain general qualifications* such as:

Occupant Eligibility:

  • Income is sufficient to cover rental payments of not more than 31 percent of gross income. If the current market rent is greater than 31 percent of the occupant’s monthly gross income, a lease will not be offered.
  • Inspection of the property indicates that the occupants have been keeping the property in good condition.
  • The number of occupants is appropriate for the home and in compliance with local laws and homeowner association rules.
  • If pets are present, renter’s insurance is obtained, if required.
  • The occupants signing the lease must agree to a credit review and all occupants over the age of 18 must have an acceptable background check, including receiving clearance from the Office of Foreign Assets Control (“OFAC”).
  • There are no signs or reports of illegal activities conducted at the property.
  • The property is to be used as a primary residence.

Property Eligibility:

  • There are no zoning or homeowner’s association (HOA) rental limitations that would prohibit a lease.
  • Repairs required to make the property habitable are deemed to be in an acceptable amount based on the property value.
  • The property is in compliance with local rules and laws or can be brought into compliance within 30 days.
  • The property is not within a target area for any corporate, government or community neighborhood stabilization plan which may need the property as part of the plan for purposes other than residential.
  • The market rental income is anticipated to cover ongoing maintenance and management costs.

Note: Consideration for a D4L is initiated by servicers. If you are a borrower interested in pursuing a D4L please contact your servicer.

For answers to frequently asked questions please see Deed for Lease (D4L) – Frequently Asked Questions.

Servicers can find additional information at www.efanniemae.com/sf/servicing/d4l/.

* This list does not include all conditions, which may vary by location.

Source:  Fannie Mae

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