The REX HomeBuyer Agreement is an innovative financial product that provides home buyers like you a smart new way to obtain a portion of the down payment needed for a home purchase without incurring debt. The provider of the REX HomeBuyer Agreement, FirstREX Agreement Corp., (FirstREX) is not a mortgage lender and the REX HomeBuyer Agreement is not a loan or a form of credit. The REX HomeBuyer Agreement is a real estate equity investment contract, and FirstREX is appropriately licensed (typically as a real estate broker) in the states where it conducts business.
Since FirstREX is not a lender or a bank, and the REX HomeBuyer Agreement is not a loan, federal and state mortgage and banking institution licensing or approval requirements do not apply to FirstREX. However, FirstREX and the REX HomeBuyer Agreement are subject to certain state and federal laws and regulations, including the federal Fair Credit Reporting Act, the Federal Trade Commission Act, and the privacy provisions of the Gramm-Leach-Bliley Act, among others.
While federal regulations which apply strictly to lenders and banks, such as the Truth-In-Lending Act and the Real Estate Settlement Procedures Act, and their state law counterparts, do not directly apply to FirstREX or the REX HomeBuyer Agreement, FirstREX recognizes the importance of the consumer safeguards contained in these regulations, and has thus imported many of the critical consumer safeguards provided by these laws into its product and processes.
We cannot overemphasize the importance of having a full understanding of the features of the REX HomeBuyer Agreement before entering into a REX HomeBuyer Agreement. You are urged to carefully review the REX HomeBuyer Agreement Product Guide, QuickStart educational video, REX HomeBuyer Agreement Important Information Notice and other REX HomeBuyer Agreement disclosures, and the REX HomeBuyer Agreement legal documents and other materials before entering into a REX HomeBuyer Agreement. These documents and materials will be given to you during the REX HomeBuyer Agreement application process.
You are also strongly urged to review these documents and materials with your legal, tax and financial advisors, and family members, before deciding if a REX HomeBuyer Agreement is right for you, and in order to fully understand the following:
1. Your responsibilities under the REX HomeBuyer Agreement
2. The cost of obtaining a REX HomeBuyer Agreement
3. What will happen when you decide to sell your home or otherwise end your REX HomeBuyer Agreement
4. The rights your REX HomeBuyer Agreement gives you
5. The rights your REX HomeBuyer Agreement gives FirstREX
6. The tax implications of the REX HomeBuyer Agreement
7. The effect of the REX HomeBuyer Agreement on your family and heirs
While there are no interest charges to you or monthly payments in connection with the down payment funding you receive from FirstREX using a REX HomeBuyer Agreement, you will be responsible for interest charges, monthly payments and financial obligations in connection with any other mortgages, lines of credit or loans which you may have or take on your home. You are also responsible for real estate taxes, hazard insurance, and any other obligations with regard to your home.
During the term of the REX HomeBuyer Agreement, you are required to maintain the property in good condition, subject to normal wear-and-tear, and special conditions may apply in the event such requirements are not met. Figures used in all examples provided to you on this website or otherwise are for the purpose of illustration only; the terms offered in a specific REX HomeBuyer Agreement may be materially different. Certain fees, including a transaction fee, will apply when you enter into a REX HomeBuyer Agreement. The amount and purpose of any fees will provided to you in writing during the REX HomeBuyer Agreement application and offer process.
When you sell your home, you, and not FirstREX, will be responsible for paying – either from your share of any sale proceeds or from your other assets – all loans that are secured by liens on the property and all costs you may incur in selling your home, including real estate sales commissions and the cost of an appraisal. If the sales proceeds are not sufficient to pay all of the mortgage loans, commissions and closing costs, and the amount due to FirstREX, you are required to make up any shortfall. If your home drops significantly in value, we can lose our entire investment, which is the down payment contribution you receive at the start of the REX HomeBuyer Agreement, but nothing more. We cannot lose more than the amount we give you at the start of the REX HomeBuyer Agreement.
If the value of your home rises dramatically, we can earn a substantial return on our investment, but that would typically mean that you also made a significant profit on your home. The amount that FirstREX earns as its return on its investment may substantially exceed the total amount of interest payments that you would have paid if you had borrowed a similar amount. While FirstREX will typically subordinate to new loans offered to you by mortgage lenders, in an amount up to an agreed limit, we cannot guarantee whether mortgage lenders will agree to lend on a property with a REX HomeBuyer Agreement to the same extent or on the same terms as they would for a property without a REX HomeBuyer Agreement.
After the first three years of your REX HomeBuyer Agreement you may request to end it by special termination. To do this, a third party independent appraisal will be obtained to determine the current value of your home. The special termination payment will equal the amount originally invested by FirstREX plus any profit FirstREX would have made if you had instead sold your home for the appraised value. The REX HomeBuyer Agreement is designed for use by home buyers who intend to own occupy their homes for a period of at least three years. It is not designed for use as short-term (less than three-year) financing, and we actively discourage home buyers from using it for such a purpose, or for any purpose involving real estate speculation. Therefore, if you sell your Property or the REX HomeBuyer Agreement otherwise ends within the first three (3) years of the Term, special provisions apply which improve the investment outcome for FirstREX. If you are unsure about whether you will remain in your home for at least three years, you should consider alternatives to the REX HomeBuyer Agreement to fund your Property purchase. While the REX HomeBuyer Agreement provides special conditions and terms for attributing the value of certain improvements made to the property during its term to the homeowner, so that FirstREX does not benefit from any increase in value attributable to such improvements, there may be – and often is – a significant difference between the actual cost of improving or remodeling your home and the increase in market value attributable to such improvements as of the time of sale. Any significant decrease in value of the property resulting from your failure to maintain or repair property conditions during the term of the REX HomeBuyer Agreement will be attributed to you when the REX HomeBuyer Agreement ends.
If you do not honor your obligations, or you default under the REX HomeBuyer Agreement, FirstREX has various rights, including the right to foreclose on the property. At the end of Year 30 you are required to end the REX HomeBuyer Agreement by either selling your home or by otherwise settling the REX HomeBuyer Agreement. Following the death of all of the homeowners that signed the REX HomeBuyer Agreement, the heirs or estate will be required to settle the REX HomeBuyer Agreement within a certain period of time by either selling the home or otherwise settling the REX HomeBuyer Agreement. Each homeowner’s tax situation is unique. FirstREX does not give tax advice. FirstREX urges you to contact your tax professional for any tax advice regarding the REX HomeBuyer Agreement.