Several major homebuilders are weighing plans to come together to provide up to 1 million new homes for first-time buyers, labeled “Trump Homes,” according to a new report.
Lennar and Taylor Morrison are among the developers involved in the proposal, which will be financed by private investors, according to a Bloomberg report citing sources familiar with the matter.
These homes will be intended to provide a pathway to homeownership for first-time buyers, with one program that allows monthly rental payments over three years to be used for a down payment, in a lease-to-owner version, sources said.
The plan is reportedly short-term, and it is not clear whether it will gain critical support among developers or the support of the Trump administration, according to the report.
Although the program will be privately funded, to be beneficial to builders, it may require changes to the loan guarantees provided by the federally regulated giants Fannie Mae and Freddie Mac.
Industry players pitched the plan to the Trump administration last year, but a White House official told Realtor.com® that it’s too early to speculate whether the plan will gain federal support.
“President Trump has promised to end it Joe Biden“The problem is inflation and affordability, and the administration is constantly evaluating new policy actions to do just that,” the official said on condition of anonymity.
Lennar declined to comment. Taylor Morrison did not immediately respond to a request for comment.
Trump’s reported housing plan follows the President Donald TrumpThe latest announcement is for major housebuilders to increase construction rates to tackle housing affordability.
“I’m calling on Fannie Mae and Freddie Mac to make the Big Home Builders go and, in doing so, help restore the American Dream!” Trump wrote on Truth Social in October.
In late December, however, Trump appeared to change his tune, shifting his emphasis from lowering home prices to keeping existing homeowners “rich and happy” with record home prices.
Trump also expressed support for senior housing in his speech in Davos last month, and at a Cabinet meeting last week.
“I don’t want to drop those numbers, because I want them to continue to have great value for their home,” Trump told reporters in the Oval Office. “In other words, you create a lot of housing all of a sudden, and it lowers housing prices.
“I don’t want to lower home prices. I want to raise home prices for people who own their homes. And they can be sure that’s what’s going to happen.”
The president’s shift in rhetoric raises questions about whether he can support a massive construction campaign from homebuilders.
Realtor.com’s chief economist Joel Berner and questions whether a particular lease method would benefit many first-time homebuyers.
“The reason this has never been done on a large scale is that leasing by owner is not a very good thing for buyers,” he said.
Renting to own only makes sense in certain situations where the buyer can’t afford a mortgage now, but will in the future, and is willing to commit to a particular home up front, Berner said. The buyer-to-leaseback is gambling that the value of the home will not decrease during the lease term.
“It’s a small percentage of consumers who meet all of these conditions,” he says. “Building more homes is good for buyers, and building larger buildings will make homes more affordable. Just build them. Sell or rent them as you normally would.”
