There are many signs of a chilly, if not somewhat frozen, U.S. housing market right now. Rocket Companies, the nation’s largest mortgage lender, this week launched a new mortgage closing cost credit program that aims to shake loose a few icicles and help renters transition to homeownership.
The feature, called RocketRentRewards, is available now and can be applied automatically, should the home purchaser select this program. For renters who do make that selection and close their home loan with Rocket Mortgage, RocketRentRewards takes 10% of rent paid in the prior 12 months and applies it directly toward closing costs on a home loan, up to a $5,000 limit.
Just a couple catches: (1) the rent has to have been paid on time, and (2) the renter has to be purchasing a home they’ll live in.
National Mortgage Professional heard from Rocket's chief business officer and economist, Bill Banfield, to learn more about the new perk. He noted that people are familiar with the concept of “rent-to-own,” which RocketRentRewards resembles a bit — only the bill for the closing cost credit is footed by Rocket Mortgage, not the entity to whom the renter is paying rent.
“In this case, what we said is, ‘Let's take the on-time [rental] payments that somebody's been making, and that's all documentable through lease agreements and other things, and give them a credit back,” Banfield said. “And we think it's an interesting way to help a renter get on the homeownership ladder and start to build generational wealth.”
“There's upwards of a hundred million people that are renting in this country right now, sometimes in apartments, sometimes single-family homes, you name it,” Banfield noted. “When they go to purchase a home, we will automatically go and document that rent, and in the event that they choose this program ... we will automatically apply the credit.”
This move from Rocket comes as rents nationally have been softening and costs of homeownership, including variables such as taxes, insurance, and maintenance, have been rising, making the renter-to-homeowner transition less feasible for many.
Notably, RocketRentRewards is available to all renters getting home loans, not just first-time purchasers, through Rocket Mortgage. So, someone who owned a home, sold it, and went back to renting for a year — such as one who relocates to another state might do, for example — would also be able to access this closing cost credit program.
To be clear, in order to obtain RocketRentRewards’ maximum of $5,000, you’d need to have paid rent of about $4,167 a month over the last year, which gets into Manhattan studio loft apartment territory, or something to that tune. According to the January 2025 Rent Report from Realtor.com released Tuesday, nationally, the median-priced two-bedroom rental unit cost $1,887/month, and that amount would provide a RocketRentRewards home loan closing costs credit of $2,264.
Who does this target?
So, who does Rocket see benefitting the most from this new feature? What’s the likeliest target community?
“I don't think the feeling of being ‘trapped in your rent’ is unique to just first-time homebuyers and people with lower incomes; it's across the board,” Banfield told NMP. “And so that's why we gave a spectrum here. If you're paying $5,000 in rent right now, chances are you're not buying your typical starter home — you're maybe looking to buy a larger home.”
“So, the rent credit would be very valuable even for that category,” he said, but is likely to also benefit those with lower incomes and in underserved communities.
Banfield contended that with home prices and interest rates remaining high, many renters are struggling even with the concept of being able to purchase their own homes. “We hear anecdotal stories all the time about teachers, for example, who have been renting for a long time and just don't think they can buy a home,” he noted.
“All we're trying to say is, ‘Look, we're gonna help you. We're gonna bridge that gap. We'll help cover some of the closing costs for you, and if you're ready, this makes it more affordable for you to get in there,” Banfield said.
“This is about, ‘Can you make it more affordable, and can you get them to where they want to be so that they can own a piece of the American Dream?” he added.
Given the present state of the market, NMP asked, might we see any further mortgage product/ program innovations from Rocket?
“We've got a lot of things that we're working on to try to help buyers and people who want to refinance,” Banfield responded. “And, we have a strong second mortgage offering. We're very positive on the outlook for 2025.”
“Rates might be a little bit higher for longer, but there's still opportunity in there,” he contended.
