Fannie Mae announced this week that it will allow eligible troubled homeowners to rent their own home back. This is called a Deed for Lease program. This means they sign the Deed back to the lender and sign a lease to remain in the home. The effort is aimed at borrowers with mortgages owned or guaranteed by Fannie Mae who do not qualify for or cannot sustain a loan modification. Borrowers must live in the home as their primary residence and must be released from any subordinate liens. Tenants of homeowners may also be eligilbe to lease back from the lender.

Homeowners must show they can afford market rent, but that payment cannot be more than 31% of the borrower's pre-tax income. Leases may be up to 12 months, with the possibility of renewal or month-to-month extensions. If the property is sold, the new owner picks up the lease.