THE WASHINGTON POST.
SATURDAy, MARCH 14, 2020EZ12
BY DIMA WILLIAMSS
oaring home prices. Tight inventories.
Student debt. Job mobility. Inability to
save enough. Bad credit scores.
There is a slate of reasons why
homeownership lies beyond the reach
of many people.
For JB Harmon, a sales engineer manager in
suburban Atlanta, it was a less-than-ideal
credit score.
Purchasing a home seemed improbable until
Harmon learned about Divvy Homes’ lease-op-
tion program.
A lease option, which also may be referred to
as a lease purchase, rent-to-own, lease-with-
the-right-to-buy or contract-for-deed agree-
ment, offers a tenant the possibility of purchas-
ing the rental home they live in. The nontradi-
tional approach to homeownership is being
overhauled from a sordid past.
Rent-to-own contracts for residences began
to mushroom in the mid-20th century, when
lenders would not work with African Ameri-
cans. In such compacts, a tenant would pay a
premium (an amount in addition to rent) for
the option to purchase the property at a later
date. Over the years, many investors and
landlords offering lease options have faced
criticism and lawsuits accusing them of en-
snaring minorities and low-income people in
unfair deals.
“That option premium, it was just a fee,” s aid
Adena Hefets, founder of Divvy Homes. “You
didn’t own any equity from it. It was purely a
fee. And if you missed any single payment, you
would lose your rights to buy the home. So
that’s why it came across as extremely predato-
ry.”
Lease-option companies these days say they
operate under more customer-friendly busi-
ness practices. Divvy, which currently operatesCOVER STORYOwn a
house by
making
rent pay
A guide to lease-option plans
for aspiring homeowners