Home Partners of America Provides Atlanta Consumers A New Path to Homeownership

Staff Report From Metro Atlanta CEO

Thursday, November 30th, 2017

Home Partners of America and New Penn Financial are pleased to announce a new pilot, the "Ownership Conversion Pilot," to help qualifying first-time homebuyers, in Atlanta and throughout the country, succeed in their path to homeownership.

Many first-time homebuyers are unable to purchase a home today because of high down payment requirements, financial circumstances such as student debt, or the need to build credit. Additionally, Atlanta home prices are rising; during the past 12 months, the value of residential real estate in the area rose 5.43 percent.* In this pilot, residents in Home Partners' Lease Purchase program who are first-time homebuyers and meet Fannie Mae's eligibility requirements may work with New Penn to use any home price appreciation of the home they rent towards their down payment at purchase. 

How it Works

Under Home Partners' Lease Purchase program, approved applicants work with a licensed real estate agent of their choosing to select the right home for them. Applicants can choose from a wide portfolio of homes available for sale across the country that meet Home Partners' criteria.  Home Partners purchases the selected home, leases the home to the resident with pre-determined rents and provides a right-to-purchase at pre-set prices for a defined future period (three to five years). While the resident's only financial commitment is to lease the house for one year, he or she may renew the lease for additional one-year terms (generally three to five years).

Current and new residents in Home Partners' Lease Purchase program are eligible to participate in the Ownership Conversion Pilot and may have the opportunity to take advantage of any appreciation equity once they have demonstrated 24 months of consecutive on-time payments, completed home ownership education or counseling, and meet other underwriting and eligibility criteria. Since this is a test and learn opportunity, the pilot will be available until late 2019.

Residents who participate in this pilot could benefit from features and requirements that include:

  • If the home goes up in value during the rental period, the resident could receive the benefit of appreciation when it comes time to purchase the home;

  • Residents may qualify for a mortgage using as little as their security deposit as a down payment or towards closing costs;

  • The rental period gives residents time to prepare for homeownership, repay other debts, such as student loans, or save for closing costs; and

  • Residents are positioned for long-term success by being required to complete homeownership education or counseling.

Home Partners' existing residents may be eligible for the pilot immediately after launch if they have already met the 24 month timely payment and counseling/education requirements.  Additionally, new residents who begin Home Partners' Lease Purchase program during the two-year period after the pilot launch date may be eligible for the pilot as well.

Currently, New Penn Financial serves as the exclusive lender for the pilot. The Ownership Conversion Pilot is a key element in New Penn's affordable lending platform, aimed at providing access to credit to credit-worthy borrowers.

"Given the sizeable demographic shift of millennials moving from renters to homeowners that we expect will play out over the next decade or more, Home Partners of America is in the right space at the right time," said John Peyton, President and Chief Executive Officer of the Realogy Franchise Group. "Through Home Partners' program, our network of affiliated agents and brokers are empowered by a trusted relationship through which they can offer their rental clients a new path to homeownership."

"Home Partners' residents have worked hard to establish and maintain good credit," said Robert O'Han, Senior Vice President, Consumer Direct Channel at New Penn Financial. "New Penn is proud to be the lender that is financing the dream of homeownership."

"Our goal is to provide our clients a transparent and flexible path to homeownership," said Bill Young, Co‐Founder and Chief Executive Officer of Home Partners. "Many people want the benefits of living in a single‐family home but are not yet ready to buy for a variety of reasons. We are committed to helping as many of our residents succeed when the time is right.  The Ownership Conversion Pilot provides potential first time homebuyers with the flexibility to prepare for homeownership while renting a home and the potential to reduce their down payment requirements."