Overview
- Lennar and Taylor Morrison have worked on a proposal to sell entry-level houses into a rent-to-own pathway backed by private investors, according to people familiar with the talks.
- One version would have investors rent the homes for three years with part of each payment accruing toward a down payment if the tenant opts to buy.
- Participants have discussed a scale as high as about one million homes, which would represent more than $250 billion in housing, based on estimates cited in reports.
- A White House official said the administration is not actively considering the plan, and people involved noted many unresolved issues, including the role of federally backed mortgages and who bears risks, with initial losses slated for private investors.
- Shares of major homebuilders rose on the reports, including gains of about 4% for Lennar and Taylor Morrison, as the proposal surfaced alongside the administration’s broader housing agenda to curb large investor purchases and lower mortgage rates through GSE MBS buys.