Cash-strapped home buyers have an option to rent-to-own at many Chicago area real estate developments.

Real estate experts say the benefits of renting to own are myriad, and one of the most popular reasons is that most rent-to-own agreements don't require a hefty down payment or upfront costs. Terms on renting-to-own vary per property and oftentimes terms are specifically customized by the financial situation of the renter.

"In a lease-to-own, you basically have two contract agreements, one a lease and one a purchase agreement with an agreed upon purchase price," said Andrew Hayes, spokesman for Baird & Warner. "An earnest money deposit is collected and held by either an attorney or preferably the listing broker just as it would be in a normal purchase contract."

Hayes says Baird & Warner "highly recommends" that the property owner utilizes the services of a real estate attorney that is experienced in purchase options and lease-to-own transactions.

On the Near South Side, New West Realty has launched the "Path to Home Ownership," a rent-to-own program, at Eastgate Village, a planned 300-unit residential development at 26th Street and Martin Luther King Drive. The 10-acre Eastgate Village features a mix of 3-story townhomes and walk-up condominium buildings.

The rent-to-own program recently increased the rate on its current plan to now call for 75 percent of the prospective buyer's monthly rent to be held in escrow as down payment cash to purchase the residence at the end of the year, said Ted Mazola, partner in New West Realty, which is co-developing Eastgate Village with Mercy Developers, a partnership of Fogelson Properties and Forest City Enterprises.

"Homeownership for first-time buyers is attainable, especially when you combine our rent-to-own program with today's rock-bottom mortgage rates and President Obama's stimulus package," Mazola noted. "That package gives first-time home buyers an $8,000 tax credit that does not have to be paid back."

The 1-bedroom, 2-bedroom and 3-bedroom condominiums at Eastgate Village are priced from the upper $200,000s to the $500,000 bracket. Nine immediate occupancy townhomes and eight walk-up condos are targeted for the rent-to-own program.

For example, the Adler 62A floor plan is priced at $279,900. Under the rent-to-own program, the buyer of the 2-bedroom condo would lease the unit for one year at a monthly rent of $1,650. With 75 percent of the rent -- $1,237.50 -- escrowed each month in the down payment account, the buyer would have accumulated $14,850 in cash by the end of the year.

For information on Eastgate Village, call (312) 683-0660 or visit www.eastgatevillagechicago.com.

One of the rent-to-owners at Eastgate Village is 27-year-old Lisa Repsold, who currently has a one-year rent-to-own lease on a 2-bedroom, 4-story townhome with her boyfriend, James Hutchens.

Repsold was having trouble selling her Gold Coast condo. She fell in love with the townhome at Eastgate Village.

"For me, the rent-to-own option was a perfect fit. I got the chance to move into the townhome of my dreams and while my condo is being sold, I can rent to own it," she said. "The developers are even helping me sell my condo.

"I think I got a great deal. Right now if I add my mortgage payment on the Gold Coast condo and add my rent-to-own payment, I'm actually paying less than what my actual payment will be on my new townhome mortgage. So, for me, rent-to-own is a great way to save money and get the opportunity to get into the new townhome, even though I'm not quite ready," Repsold said.

In west suburban Countryside, the new Clocktower Pointe of Countryside is offering a rent-to-own program that saves 50 percent of the monthly rent in a special down-payment escrow account.

The Conneely Group, developer of the 108-unit luxury development on Willow Springs Road, says renters sign a one-year lease plus a contract to purchase their residence, and half of their $2,500 a month rent will be applied to their down payment at closing at the end of the year.

"Our rent-to-own program helps prospective condo buyers save $15,000 in down payment cash while they reside in a luxury condominium for a year and effectively pay $1,250 a month in actual rent," said Ron Rydin of TCD Properties, the exclusive sales and marketing agent for Clocktower Pointe LLC.

The development features 2-bedroom or 3-bedroom residences with 1,882 to 1,972 square feet of living space. Base prices range from $449,900 to $464,900.

Plans for the $50-million Clocktower Pointe development call for six condominium buildings to be clustered on a winding, landscaped road overlooking a signature stone and brick clocktower and two ponds. Construction on the 18-unit first phase of Clocktower Pointe development is nearing completion and units are ready for immediate occupancy.

For more information, call (708) 516-8510, or visit www.clocktowerpointe.net.

Out in west suburban Oak Park, Baird & Warner is marketing Garden Grove Townhomes with a rent-to-own option.

The new 12-unit town house development, 1193 S. Grove, features 2- and 3-bedroom units priced from $379,900 to $450,000. Rent-to-own options for a 2-bedroom town house is $2,300 per month, with $400 of the rent each month going toward the down payment. Rents for a 3-bedroom town house are $2,500 with $500 per month going toward the down payment.

"The town houses are great for young people starting out or for those that don't have enough money for a down payment," said Geri McLauchlan, broker for Baird & Warner in Oak Park. "Rent-to-own is also good for those who have blemishes on their credit and need to clean up their credit score. Right now, credit bureaus are strict and you may not realize that you don't have good credit. So, Baird & Warner has an in-house program that helps people improve their credit score."

McLauchlan says the rent-to-own option is a good idea for some people and a valuable alternative. "You have to pay rent anyway, so you might as well have it go toward something [ownership]," McLauchlan said. Rent-to-own clients at Garden Grove Townhomes can work with a lender through Baird & Warner, or choose their own lender.

For more information on Garden Grove Townhomes, call For information, (708) 903-1338.

In the North Kenwood neighborhood, Ronald West is getting ready for his lease to expire and take ownership of his condo on the 3800 block of South Lake Park.

"Last year I was going through a divorce and needed to find a new place to live," said West, 42, a human resource business partner for a health insurance company. "I was committed to homeownership and the only way for me was the rent-to-own program."

So for the past year, West has been renting-to-own a 2-bedroom condo. Approximately 25 percent of his rent went to a down payment to buy the unit.

"I was able to lock in the purchase price a year before I actually bought the condo. So that was very attractive. I really recommend rent-to-own programs. It gives you time to get your finances in order in terms of a down payment," West said.

West rented-to-own his condo through the lease-to-own program at Builders Center of Chicago, which has offices on the North and South Sides.

"We're different than most rent-to-own companies because we work directly with a number of real estate developers and have a large selection of condos and town houses to choose from," said Anatoly Zarkhin, general partner of Builders Center of Chicago.

The company's "Road to Ownership Program" lets people "put their foot in the door" on owning a property, Zarkhin said. Depending on the property, rent-to-own clients may pay a small upfront fee and up to 47 percent of the rent will go toward homeownership.

Builders Center of Chicago currently has a variety of 1- to 3-bedroom condos and town houses priced from $155,000 to $400,000. One of the properties is a 10-unit building at 4234 S. Ellis. The first floor is commercial. The upper floors contain 2- and 3-bedroom condos priced from $330,000 to $400,000. The monthly rents begin at $2,100 and buyers have to put down 3 percent of the purchase price to qualify for the rent-to-own program. Rent-to-own terms range from 1 to 3 years.

The firm also is marketing a 25-unit condo conversion at 1412 W. Arthur in Rogers Park. The brick building features 2- to 3-bedroom condos (some duplex) priced from $220,000 to $330,000. Rent-to-own rates range from $1,500 to $1,900 and require a 3-percent down payment.

"One of the best things about the rent-to-own program is that people can lock in a purchase price now, even though they won't begin to fully own it for two to three years," Zarkhin said.

The program also includes financial counseling and property management. "We set buyers up to succeed in purchasing the condo; we don't want them to fail. So not everyone qualifies," Zarkhin said.

"Through the program we offer credit counseling and help them build up their credit rating while they're renting so they're in good shape when it comes time to buy. We also set the client up with a lender and work with both to make the process smooth."

For information on Builders Center of Chicago, call (773) 751-5151; www.road2ownership.com.