Rent to Own
For renters, we will create a rent-to-own program to (1) build generational wealth through equity and (2) increase residents’ investment in the local community, now having a share of local equity.
Regardless of credit score, if residents have consistent income and a history of on-time rent, they can experience the American dream of home ownership. With more homeowners in the community, there will be greater concern and care for the quality of the local community, which prevents crime, builds the local economy, and increases general happiness. Third Party will make all this possible by having the city and/or state back the mortgage of rent-to-own program participants. Ownership is key for building generational wealth and increasing the quality of local communities, and Third Party will make this possible for all Americans. Read on to learn more!
This policy was created by Larry Sharpe.
Home ownership empowers a renter to start building generational wealth through equity. Now the renter has a greater stake in the local community and is more likely to invest economically and socially. The community benefits with a greater sense of pride and belonging, which decreases the likelihood of crime and litter.
Affordable Housing Providers
Renters join the rent-to-own program through various affordable housing providers (AHP), programs that purchase homes on behalf of the renter with an option to buy the property later.
If a renter is not able to buy the home by the agreed time, the AHP may offer in-house financing, though typically at a higher interest rate than traditional banks. As such, we encourage rent-to-own participants to get a mortgage from a local credit union in order to (1) get a competitive interest rate and (2) support local businesses.
Affordable housing providers typically benefit by purchasing “fix up” properties at a discount. Renters may then repair and enhance the property, which they would have done anyhow, but such enhancements can be CREDITED towards the renter’s down payment, so everyone wins.
Local Credit Unions
Local credit unions will provide mortgages for rent-to-own participants. These mortgages will be backed by a public bank (see below), lowering risk for the credit union. Additionally, the credit union will require rent-to-own participants to enroll in a financial literacy program approved by the credit union, which lowers mortgage default risk. In summary, credit unions benefit 3-fold, (1) more mortgage customers, (2) lower risk of mortgage default due to public bank backing and required financial literacy training, and (3) lower FDIC insurance premiums when paid to public bank.
Financial Literacy Programs
Local credit unions will require rent-to-own participants to enroll in a financial literacy program approved by the credit union. This helps renters keep and maintain their home by learning how to manage their finances in a comprehensive manner. The credit unions do not have to create a financial literacy program, they can leverage existing programs whether they be non-profit or for-profit.
The City and/or State will have a public bank that backs the mortgages of rent-to-own participants. Not only does this widen home ownership opportunity for renters, it provides a revenue stream for the city and/or state since participating credit unions will pay their FDIC insurance premiums to the public bank rather than the Federal government. This new revenue stream lowers the tax burden of city/state residents.
If our rent-to-own program seems "pie in the sky", such a program already exists - Keys to Home Ownership. Our goal is to incentivize the creation of many more similar programs throughout the nation.