| Why trust us: To create this comprehensive guide, we researched the available housing options in San Antonio, consulted with local housing experts, and had the guide reviewed by a real estate professional with rent-to-own experience. Learn more. |
Rent-to-own allows potential homeowners to rent a property with the option to purchase it during the lease agreement (usually one to five years). It provides an alternative path to homeownership if you might not qualify for a traditional mortgage or can't afford a large down payment.
But rent-to-own programs aren't cheap. There’s usually an up-front "option fee" or down payment (1–2.5% of the home's value). And the monthly rent is typically higher than average in your area ($1,750 for a 3-bed home in San Antonio).
What to know about rent-to-own homes in San Antonio
Legitimate rent-to-own programs are lacking
"It's hard to get somebody into one of the rent-to-own programs, because either the programs aren't really effective, or we just don't have enough options," Ryan McDaniel, a realtor with Keller Williams Heritage, explains.
And according to Martin Orefice, CEO of Rent To Own Labs, most rent-to-own homes in San Antonio are single-family or duplex houses owned by landlords or investors.
Buying may be a better choice
"The whole goal of rent-to-own is getting the purchase, but if they're qualified now, we usually [recommend] actual ownership," says McDaniel. "Buying a house should be possible "if you've got good credit and income coming in."
Home prices in San Antonio are also lower than the national median ($340,000 compared with $415,000) — so the conventional home buying process may be more affordable in the long run than a rent-to-own program.
Low credit is the biggest roadblock that keeps people from qualifying for a mortgage in San Antonio, he adds. Down payment assistance programs and grants can make buying a home easier by offering mortgages with more relaxed requirements.
Compare rent-to-own options in San Antonio
Legitimate rent-to-own companies operating in the San Antonio market include Divvy Homes and Home Partners.
Divvy Homes is one of the most well-known rent-to-own companies operating in the area. It’s also the easiest to qualify for, based on its minimum requirements (550 FICO and $2,500/mo income).
McDaniel has referred some of his clients to Divvy and says it's "a great deal if someone is going to actually stick with it and buy the house." And since Divvy charges a 2% termination fee (which is higher than its competitors), you should only consider it if you're confident you'll buy the house at the end of your lease.
Home Partners of America has over 2,000 active listings in the San Antonio market, low up-front costs, and easy eligibility requirements (though higher than Divvy's).
Other rent-to-own companies, such as Trio Homes, have significantly fewer listings and options available in San Antonio.
Landlords
Rent-to-own agreements come in a variety of payment structures, lease lengths, purchase prices, and other conditions.
Independent landlords of rent-to-own homes can set their own eligibility requirements. Before you agree to any kind of rent-to-own program, check that the contract terms align with your current financial profile and future goals.
» LEARN: How to negotiate a rent-to-own contract
Get help from a local realtor
If you're considering rent-to-own homes, either through a company or a local listing, it's smart to have a local realtor in your corner.
A realtor can help guide you through the ins and outs of rent-to-own homes, including spotting red flags, fraudulent listings, and bad contracts. They can also refer you to a mortgage lender to see if you qualify for financing to buy now (versus going the rent-to-own route).
» LEARN: How to find a realtor that's right for you
🔎 Pro tip
Your credit score affects your ability to qualify for a mortgage. Check your credit score now, and you can take work to improve it and correct any mistakes in your credit report.
Not sure where your credit stands? Get your credit report at AnnualCreditReport.com. This free resource gives you access to your scores from all three major credit bureaus (Equifax, Experian, and TransUnion) once a year.
Rent-to-own home alternatives in San Antonio
Down payment and closing cost assistance programs
Neighborhood Housing Services of San Antonio provides first-time home buyers in Bexar County with up to $20,000 in the form of a second mortgage to use toward their down payments or closing costs.
Texas Homebuyer Program gives eligible first-time home buyers funds toward down payments and closing costs through its network of approved mortgage lenders.
State grants
San Antonio Homeownership Incentive Program (HIP 120) offers 0% interest and no-payment loans of $1,000 to $30,000 to assist with the down-payment and other home buying costs. The program forgives 75% of the loan over 10 years.
Homes for Texas Heroes Program offers home loans and down payment assistance to state-employed professionals, including educators, emergency personnel, veterans, and nurses. It requires a minimum credit score of 620 and has maximum income requirements.
Local affordable housing options
Opportunity Home San Antonio offers rental housing and Section 8 assistance to children, adults, and senior citizens. The program has over 6,000 public housing units at 70 properties, as well as programs for veterans and individuals experiencing homelessness.
First-time home buyer loans
| Loan type | Min. down payment | Min. credit score | Max. debt-to-income level |
|---|---|---|---|
| FHA | 3.5% | 10% | 580 | 500–79 | 43% |
| USDA | None | Varies by lender | 41% |
| VA | None | 580 | 41% |
| Rental | 1–2 months rent | 680 | 33% |
| Conventional | 20% | 620 | 45% |
» LEARN: Improve your credit score to expand your borrowing options
FHA loans
FHA loans are a popular financing option for first-time home buyers with limited savings or credit history. If you have a credit score of 580 or above, you can qualify for a 3.5% down payment. However, some properties may not be eligible for FHA financing, and extra costs like mortgage insurance premiums will apply.
USDA loans
USDA loans provide financing in rural areas, including payment assistance, for low-income applicants. The zero-down program is available in select San Antonio areas, and you’ll want to look outside Texas State Highway Loop 1604 for eligible properties.
VA loans
VA loans make homeownership more accessible to veterans by offering benefits such as zero-down financing and no minimum credit score requirement. You can also skip private mortgage insurance. While VA loans have specific eligibility requirements, including a one-time funding fee, they can be a great option for military personnel and their families.
Free resources in San Antonio
Local housing counselors
San Antonio housing counselors offer free pre-purchasing and rental counseling, making them a valuable resource for anyone looking to buy a home. They can also provide unbiased opinions on rent-to-own options and point you to other useful resources.
» FIND: HUD-approved housing counseling locations in Texas
Housing education programs
The San Antonio Housing Authority provides various services for low-income families, including affordable housing options and rental assistance programs. Additionally, they offer a housing education program aimed at helping families prepare for homeownership by providing resources and training on financial literacy, credit management, and other essential skills.
Neighborhood Housing Services of San Antonio (NHSS) is a nonprofit organization that provides various services to support affordable homeownership and the revitalization of neighborhoods in San Antonio. NHSS offers a comprehensive homeownership education program that equips families with the knowledge and skills necessary to navigate the home buying process, from financial preparedness to finding and purchasing a home.
Why you should trust us
Our team at Clever spent several weeks learning the ins and outs of rent-to-own homes to create this comprehensive guide. We identified legitimate companies that operate in your area, consulted with local realtors, and researched government housing resources.
Our experts
- Ryan McDaniel, a San Antonio realtor with Keller Williams Heritage, with more than 15 years of combined experience in wealth management, financial advising, and real estate.
- Martin Orefice, CEO of Rent-to-Own Labs, which offers an online platform for finding legitimate rent-to-own listings.
- Steve Nicastro, a real estate professional who has advised numerous clients on whether rent-to-own housing is a good option for them. His expertise helped us provide a more in-depth understanding of the rent-to-own process.
