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Choice Lease is a first-of-its-kind entirely private sector housing program not reliant upon government subsidies, according to a news release from Home Partners of America. The program offers qualified applicants below-market rents and paths to homeownership unavailable before.
For nearly a decade, Home Partners' mission has been to provide people who would otherwise be locked out of the traditional single-family housing market a new path to homeownership. Its platform enables families, often who are not mortgage-ready, to identify a home they love, purchases the home on their behalf, and leases it to them with long-term fixed-rate rental and purchase options. According to Home Partners, there are no financial penalties or non-refundable deposits for residents who choose to not purchase the home.
The Choice Lease program expands the accessibility of single-family housing for low-to-moderate-income residents who face multiple obstacles to homeownership, including lower credit scores and lack of savings. Choice Lease residents are expected to have median incomes of approximately $55,000, versus the median income for homebuyers in the U.S. of $93,2001. Home Partners intends to deploy at least $1 billion to acquire homes for eligible individuals and families over the next two years, supporting a broader population than ever before.
“During a period in which constrained housing supply has made it extremely difficult to find a desirable home, our Choice Lease program is providing a critical service to many who would not otherwise be able to access the housing market. We have a unique opportunity to drive change that will help these groups access quality homes while providing a clear and transparent path to homeownership,” said Bill Young, co-founder and CEO of Home Partners of America.
Choice Lease is intended for households with income of less than 80% of area median income ("AMI") and affords them the same flexibility and benefits as its original Lease Purchase program while offering rental rates that are approximately 10% below prevailing market rates. The program also offers residents the right to purchase the home in the future at a price that would be expected to be below market value, as the annual purchase option price increases are significantly lower than market home price appreciation.
Capped rental rate increases and the purchase option prices in both Home Partners programs are transparently disclosed at the time of the initial lease, and can offer substantial savings in the current market, where double-digit rental rate increases and home price appreciation are not uncommon. The rental and purchase options, as well as free financial education and counseling programs, represent a meaningful economic commitment to help low- and moderate-income residents expand their housing choices and become homeowners when they are ready.
“In an environment of increasing home prices, Choice Lease will meaningfully expand access to affordable, high-quality homes and create a homeownership pipeline for working families and first-time homebuyers by providing below-market rents and lower purchase right prices,” said Dr. Michael Stegman, a former senior policy advisor for housing in the Obama White House at the National Economic Council, former counselor to the Secretary of Treasury for housing finance policy, and current Home Partners advisory board member.
“The lack of housing supply is a national crisis. Blackstone's scale and long-term capital make a program like this possible,” said Kathleen McCarthy, Global co-head of Blackstone Real Estate.