On February 25, Representative Raul Grijalva (D-AZ) introduced the “Right to Rent Act of 2016” (H.R. 4623) that would allow homeowners in foreclosure to remain in their homes as renters. The bill would provide people with mortgages in foreclosure on one-to-four unit buildings and on condominium and cooperative units the option of remaining in their homes for five years as tenants. Mr. Grijalva introduced a similar bill in 2013.
The former owner who transitions to renting would be charged a fair market rent as determined by an independent appraiser. The rent would be adjusted each year to reflect changes in the Consumer Price Index. The transition to a lease would not hinder foreclosure proceedings or the right of the tenant to pursue a reinstatement of the mortgage.
To be eligible, a property must have been purchased at less than the current median purchase price for residences located in the same metropolitan statistical area (or the same state if the home is outside a metropolitan area) and with a loan originated before December 31, 2008. The new owner of the property would be able to terminate the tenancy for material breach but would not be permitted to do so if the former owner pays his or her rent on time and uses the property as a principal residence during the period of the lease. The landlord-tenant relationship would be governed by local landlord-tenant laws.
Implementation and compliance with the bill’s provisions would be overseen by the Office the Inspector General at HUD and its provisions would sunset after five years after enactment.
The bill was referred to the House Committee on Financial Services and currently has eight cosponsors.
Read the text of the bill here: https://www.congress.gov/bill/114th-congress/house-bill/4623