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Building on its “Own the Dream” Super Bowl ad campaign, Rocket Mortgage is offering renters up to $5,000 in lender credits to help them become first-time homebuyers.
The new program announced Tuesday, RocketRentRewards, lets homebuyers earn closing cost credits equal to 10 percent of their verified rent payments over the past 12 months.
That’s about $2,160 based on the average U.S. monthly rent of $1,800, the company said.
“Many renters feel like homeownership is out of reach — especially as they try to save money to take to the closing table,” Rocket Chief Business Officer Bill Banfield said in a statement. “RocketRentRewards eases those concerns by rewarding clients for simply doing what they do every month — making their rent payment.”
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According to legal disclosures on Rocket Mortgage’s website, the program is only available for financing a primary residence, can’t be applied to jumbo mortgages, and is not offered to borrowers applying through Rocket’s partner Charles Schwab Bank.
Rocket believes RocketRentRewards can help bridge the homeownership gap among Blacks and Hispanic borrowers in underserved communities.
According to the Joint Center for Housing Studies of Harvard University, homeownership rates among Black (46.6 percent) and Hispanic (49.9) households lag far behind whites (74 percent), and those gaps have remained largely unchanged for 30 years.
As of the first quarter of 2024, just 8 percent of Black and 13 percent of Hispanic renter households had sufficient annual income to afford monthly mortgage payments on a median-priced home, as compared to 16 and 29 percent of white and Asian households, the center reported in its annual report, “The State of the Nation’s Housing 2024.”
Households of color often lack access to intergenerational transfers of wealth that serve as a downpayment for many white homebuyers and may have a more difficult time getting approved for a mortgage.
“Initiatives that offer downpayment assistance and increase access to affordable credit can help address these barriers,” the report noted, as do special purpose credit programs (SPCPs) that allow lenders to tailor affordable lending programs “to specific populations with a history of disparate treatment.”
Lenders that offer mortgages through SPCPs include:
Mortgage giants Fannie Mae and Freddie Mac have helped very low income borrowers qualify for a loan by providing a $2,500 credit that they can put toward their down payment, closing costs, escrow or mortgage insurance premiums.
Homebuyers in any state can find programs that provide down payment assistance using services like Down Payment Resource, which makes information available about programs and eligibility requirements through sites such as Zillow and Redfin, as well as through integrations with multiple listing services (MLSs), lenders and agents.
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