Home Partners of America announced today the launch of Choice Lease®, a new program designed to help address the affordable housing crisis and mortgage access challenges often faced by low-to-moderate-income families and historically under-represented communities. Choice Lease® is a unique, first-of-its-kind entirely private sector housing program not reliant upon government subsidies. 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. Importantly, there are no financial penalties or non-refundable deposits for residents who choose to not purchase the home. This program has proven extremely valuable to consumers in today’s rising housing market – rather than crowding out potential home buyers, Home Partners provides a unique path to homeownership while also creating tremendous value for its customers as home prices have appreciated.
The Choice Lease program takes that mission a step further by expanding 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.
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. Choice Lease 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. In today’s current housing environment of rising home prices, the value of stable, below market rents with lower purchase options has never been more impactful.
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.
Bill Young, co-founder and CEO of Home Partners of America, said, “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 are grateful that our partners at Blackstone have provided the support needed to implement this initiative, which addresses disparities in homeownership among historically under-represented communities as well as low- and moderate-income consumers. 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.”
Kathleen McCarthy, Global Co-Head of Blackstone Real Estate said, “The lack of housing supply is a national crisis. We are proud to support Home Partners’ mission of addressing housing access and affordability while also providing underserved populations with a new path to homeownership. Blackstone’s scale and long-term capital make a program like this possible.”
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, said, “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. It is exciting to see the launch of this scalable, unique program that will help level the playing field for more families without requiring public money or government support.”
Choice Lease Resident in Tampa Metro, Alyssa K., said, “Being able to find a home that I never thought I would be able to move into with such a competitive market is one of the many benefits I’m thankful for. I also really like the cost of the home under the Choice Lease program. Having a guaranteed purchase price, that is transparently laid out, helps me to navigate my finances in the future.”
A recent recipient of the prestigious Ivory Award, an annual award recognizing ambitious, feasible, and scalable solutions to housing affordability, Home Partners currently provides competitive housing options in metropolitan areas across the U.S. Choice Lease has been available in four markets on a pilot basis and as of today is being launched in an additional 13 markets.