Rent to Buy Homes, For Challenge and Low-Credit Consumers

Mr. Barack Obama, President of the United States of Americac/o Ms. Christine Romer, Chairwoman, Council of Economic AdvisersThe White House1600 Pennsylvania AvenueWashington, District of Columbia 20554

RE: $50 Million Line-of-Credit from Stimulus Funds to Mobilize 75% of Individuals to Buy Homes

My non-profit organization’s mission is to serve the most underserved of the populace: the 75% of individuals with low credit but who have an ability to pay – and we need your economic stimulus funds to succeed. Yes, serving those with low credit sounds odd given credit statistics, but it is this 75% of individuals currently renting homes who actually pay the mortgage, property tax, property insurance, and more, for the owner of a property. Take myself as a prime example: I rent a single family home in Hayward, California and pay $3500 per month. If I can pay $3500, why wouldn’t I purchase a home instead? I’ve tried several times, but I’m a ‘bad credit risk’ and no financial institution will risk their money with someone with “bad credit”. So why don’t I just “clean up” my credit? Well, I’ve been there, done that. As you know, anyone with damaged credit will continue to show as a bad credit risk. So rather than focusing on cleaning up an individual’s credit, my organization intends to assist individuals who have an ability to pay but are unable to secure a mortgage because of a low credit score, by buying and offering homes on a rent-to-own basis.The concept is to focus on an individual’s ability to pay versus the standard FICO credit score. There is an enormous economic stimulus potential here, if we can mobilize this 75% of individuals with low credit to actually “own” homes. Sounds risky? I don’t deny there is risk, but the potential upside is far greater with the proper entity (or entities) in place. This entity would be a quasi-government entity operating for the benefit of the public without government intervention, similar to the U.S. Post Office. TIL Home Corporation seeks to be the entity who will oversee this group of citizens. TIL Home Corporation’s services and responsibilities are to oversee and prevent defaults by these rent-to-own individuals with low credit scores. TIL Home Corporation aims to buy homes for the purpose of renting to those low-credit, able-to-pay individuals under a rent-to-buy agreement. An individual who is paying rent to a landlord can register to be a member of our rent-to-own network. Each member is financially evaluated and placed in a home with the appropriate rental level. If a member subsequently becomes unable to pay the initially evaluated rental amount and also defaults rent for more than four months, that member will be asked to move to another home with a lower rent payment and any accrued rent-to-own equity is transferred. During this time TIL Home Corporation will pay the mortgage on the vacated home, or anyone from our membership pool who is able to rent-to-own the vacated home can move in to