I am not sure about this program or non-profit organizations who are doing this, nor do I know anyone who has performed this transaction, but it is an interesting alternative to a straight short sale and eviction. Here’s an article explaining the transaction.
A Short Sale and Leaseback is basically a situation where the current homeowner is allowed to sell the property to a non-profit organization (i.e., HomeStrong USA), and then rent it back from the same non-profit organization.
My take on it is that there are several requirements and conditions and most financial institutions/banks will not allow it since many short sale agreements I’ve seen includes a stipulation that the purchasing party will not lease or sell it back to the previous owner.
Is a short sale leaseback legal or illegal?