Lennar, Taylor Morrison Leading “Trump Homes” Charge

The president already splashed his name on TrumpRX and Trump Accounts — not to mention a plethora of private business lines — but a new proposal promises to speak to his real estate background: Trump Homes.

Homebuilding firms are constructing a proposal for a program that would have builders create entry-level homes for the rent-to-own pipeline, Bloomberg reported. Lennar and Taylor Morrison are among the companies behind the effort, which aims for as many as 1 million homes in the program, or $250 billion worth of housing.

The bones of the proposal are a scheme for builders to construct houses that can be a pathway to homeownership. The program would rely on funding from private investors, who would take on the initial losses.

One possibility could see tenants have monthly payments count toward a down payment after a predetermined amount of time, such as three years. The backing of the federal government could help the program avoid one of the common issues with rent-to-own, which is the inability (or lack of interest) in transitioning renters to owners.

Despite the clear appeal to Donald Trump by having his name stamped on the program, the White House is not actively considering the proposal, according to an anonymous official. The plan was first presented last year, but continues to be fine-tuned.

The pitch to the Trump administration falls in line with a broader mission from the White House to address the affordability crisis in the housing market.

Last month, Trump ordered government-sponsored entities Fannie Mae and Freddie Mac to buy up to $200 billion in mortgage-backed securities as part of a bid to improve housing affordability, believing it could ultimately push down mortgage rates. It did stoke concerns, however, about reviving a strategy that contributed to the firms’ near-collapse and bailout during the 2008 financial crisis.

Trump also announced his plan to ban large institutional investors from purchasing more single-family homes, despite inconclusive evidence on the impact of institutional investors, who account for a small fraction of the single-family housing stock.

The missives coming from the administration are being questioned about how they will actually boost affordability for everyday Americans.

— Holden Walter-Warner