In 2004, home ownership hit its peak, with 70% of all American adults owning their own real estate. However, the numbers began declining every year after that once the market became over-inflated, making it difficult for many people to afford their own property. One of the unfortunate consequences of this housing boom was an expanding social class of “house poor” individuals, which are people who were paying more than 30% of their income on their mortgages and bills, constantly living from paycheck to paycheck. Many of these people eventually wound up in foreclosure after suffering a job loss, insurmountable medical bills or other economic uncertainties. Now they’re faced with the daunting task of finding a smaller place with a better mortgage rate or sifting through housing rentals.

There are many problems homeowners face when looking for new homes after foreclosure. Maurice Ortiz of The Apartment People in Chicago says the biggest obstacle to moving is the lack of a rental deposit. Candidates who haven’t paid housing bills and suffer damaged credit often need double the deposit to be considered, adds Mark Fogelman of the Fogelman Management Group based out of Memphis. To help homeowners make the transition to rentals, people who have a Federal Housing Administration insured loan may be able to get a check for $1,000 with the “Cash for Keys” program if they leave their foreclosed home “broom clean.”

Renting is quickly changing the housing landscape. For some people facing foreclosure, the banks and real estate agents are working to offer the property at the monthly rate of market value rentals for a certain number of years to help the homeowner get current again. This prevents housing prices from being slashed, property values from depreciating, banks from being saddled with too much inventory and homeowners from losing their beloved estates. Many housing analysts say that the best way to fix the housing crisis is to keep people in their homes and renegotiate the terms of their mortgage. Freddie Mac has agreed to help at least 8,600 qualified families keep their homes through their rental program in 2009.

As you can imagine, foreclosures don’t look very appealing to owners of rentals, whether it is a house, an apartment or a condo. Any wise investor would prefer to have tenants with guaranteed jobs who are guaranteed to pay their bills. However, there are a few ways to get around this. First, be honest about your situation because you’re not fooling anyone, especially with the computer screening processes nowadays! Secondly, if you don’t know anyone, then try looking for a smaller rental unit, perhaps one owned by an individual or a sub-let opportunity. A person will likely be more sympathetic to your cause and willing to work with you than a large apartment complex owned by a corporation. Be prepared to rent with another person who has good credit standing or put up a sizable deposit. Sometimes this is the best way to prove you are reliable.