President Donald Trump's administration is reportedly considering a ban on large institutional investors buying single-family homes to help alleviate the housing affordability crisis. The proposal is titled “Trump Homes” and could involve some 1 million houses.
With this proposal in clear view, shares of homebuilders Lennar (LEN) and Taylor Morrison Home (TMHC) both rose more than 3% on Feb. 3 after a Bloomberg report mentioned that the two companies were among the group working on the “Trump Homes” proposal. The plan is to have a large-scale program to sell entry-level homes, which would then transform into a pathway-to-ownership program funded by private investors. In one version of the plan, investors would lease the homes to renters, with a portion of the rent applied as a down payment credit. Tenants may choose to purchase the property after three years using the accumulated funds.
