Available in 40 housing markets in the U.S., the Ownership Conversion Pilot program through Home Partners of America and New Penn Financial allows renters to use any price appreciation of their rental home toward a down payment used to purchase that property.
The pilot program buys a home and then rents it out at a preset rental price, offering a right-to-purchase agreement in three to five years to qualifying applicants. New tenants sign a one-year lease that can be renewed annually in one-year terms; any home value appreciation that occurs during the rental period could be used to the resident's benefit later upon purchasing the home. Program participants are required to take homeownership education classes or counseling, The Washington Post reports.
Some homeowners who decide that they want to be landlords are holding on to their property for rental income and long-term appreciation rather than committing to a sale in a year or two. First-time buyers struggling to pay down student-loan debt and to save for a down payment may have dwindling hope for homeownership when prices go up. Prices rose nationwide by 5.8 percent between December 2016 and December 2017, according to the National Association of Realtors.
