I just read an article on Dennis Rodkin's blog about Hyperion Homes, a company with a new approach to renting and purchasing homes.
Hyperion works with people who do not have the credit to obtain a mortgage. Hyperion does not provide financing. Instead, Hyperion purchases a home with cash, and then rents it to the prospective buyer. Renters have an option to purchase the home at a markup of 5% over the purchase price. This price increases by 5% each year for up to 5 years. During that time, the renter can work on improving credit and securing a mortgage to purchase the home. If the renter never purchases the home, then the relationship between the renter and Hyperion ends like any other rental relationship--the renter moves out and Hyperion refunds the deposit (after any repairs, etc.)
Hyperion focuses on the Chicago suburbs in Illinois. This is because it tries to target specific school districts--something that's not really possible in Chicago. I took at look at the Hyperion Homes website. Most of the homes listed there are in the high $400,000 range. However, news reports about Hyperion mention homes that are much more affordable. Given that the company's website still feels a bit "under construction," it may be that the high-end homes on the site are window dressing.
As someone who still rents, I am very intrigued by what I have read about Hyperion so far. If I end up working with the company, I will most likely share that experience here. In any event, it is nice to see a different approach to real estate rentals and purchases. With so many consumers facing bad credit in the wake of the financial crisis, this means of calling dibs on a property may ultimately help a lot of people.