A new rent-to-own mortgage product targets renters, applying a portion of their home value's appreciation during their tenancy toward reducing their down payment.
Offered by rent-to-own company Home Partners of America, the new loans will be backed by mortgage company Fannie Mae. Realtor.com reports that to qualify, tenants must have paid their rent on time for two consecutive years, and be first-time homebuyers. Similarly, in Lennar Homes' pilot program, the home builder will pay off some student loan debt of a borrower who purchases one of their homes.
Home Partners, which was started about five years ago and has purchased nearly 8,000 homes in more than 50 metropolitan areas, plans to offer the product to current tenants and those who sign a lease over the next two years, the duration of the pilot program. The company won’t make the loans itself, but is working with New Penn Financial, a Pennsylvania-based lender.
Advertisement
Related Stories
Affordability
How Much Income Do First-Time Buyers Need to Afford the Average Home?
The median-priced home is unaffordable in 44 of the 50 largest U.S. metro areas
Affordability
What Is the Relationship Between Urban vs. Suburban Development and Affordability?
A new paper from Harvard's Joint Center looks at whether expanding the supply of suburban housing could, in turn, help make dense urban areas more affordable
Off-Site Construction
New Study Examines Barriers and Solutions in Manufactured Housing
The study from Harvard's Joint Center looks at the challenges faced by developers using manufactured housing and how they're overcoming those barriers