U.S. homebuilders are proposing a new housing idea that’s meant to ease affordability while pulling in billions of dollars from private investors. The concept has picked up the informal name “Trump Homes,” and it centers on a rent-to-own setup meant to give renters a more realistic path to buying.

Builders including Lennar and Taylor Morrison have been involved in shaping the proposal. Under the basic outline, private investors would pay to build and initially own entry-level homes, rent them out for a few years, and then give tenants the option to buy… with a portion of their rent applied toward a down payment.

That said, the plan is still very much a draft and there’s no guarantee it ever gets off the ground. A White House official said the administration isn’t actively considering the proposal at this point.

Still, the fact that builders are even floating it speaks to the spot they’re in. Mortgage rates remain high, affordability is near impossible for a lot of first time homebuyers, and demand for new homes has cooled… even though builders still have land and the ability to build.

One version of the plan envisions as many as 1 million homes. At that size, it could add more than $250 billion in housing supply, depending on prices and how many builders sign on. That would make it one of the largest privately driven affordability efforts ever discussed.

Under the structure being worked through, private investors would take the hit if things go sideways early on. Plenty of questions are still unanswered, including whether federally backed mortgages would eventually be used and how losses would be handled if prices dip or demand softens.

Taylor Morrison said it’s encouraged by conversations focused on expanding access to homeownership, but stressed it’s too early to talk specifics.

Apparently, builders have land, crews, and capacity, but far fewer buyers who can make today’s numbers work. Mortgage rates are still well above pandemic lows, and in many markets, prices haven’t come down enough to close the gap.

Most economists agree the U.S. is short several million homes, especially at the lower end of the market. Builders say the demand is there… it just needs either cheaper financing or some form of support to unlock it.

Rent-to-own models have been tried before, but didn’t really work. In the private market, they’ve often struggled with property management issues and low rates of renters actually buying the homes. Supporters of the Trump Homes idea say a more coordinated setup could improve those outcomes by bringing builders, investors, lenders, and housing agencies onto the same page.

The idea also lines up with housing themes pushed by President Donald Trump, including efforts to lower borrowing costs and make financing easier. That includes encouraging Fannie Mae and Freddie Mac to buy more mortgage-backed securities.

At the time of publishing this article, Stocks.News doesn’t hold positions in companies mentioned in the article.