What financing option allows low and moderate-income home buyers to lease a home with the option to buy?

The financing option that enables low and moderate-income home buyers to lease a home with the option to buy is best described as a Lease-Purchase Mortgage Loan. This type of agreement typically involves the renter agreeing to lease the property for a certain period with the clear intent and option to purchase the home at the end of the lease term. During the lease period, some or all of the rental payments can be applied toward the down payment of the eventual purchase, making it an attractive avenue for those who may not be able to secure traditional financing immediately.

This arrangement supports individuals who are working toward homeownership but might face challenges with upfront costs like down payments or improving their credit scores. The structure of this agreement is specifically designed to facilitate the transition from renting to owning, making it a practical choice for qualifying home buyers looking to achieve long-term stability through ownership.