Rocket Mortgage launches closing cost credit for renters

DETROIT - Rocket Mortgage, the largest mortgage lender in the U.S. and a subsidiary of Rocket Companies (NYSE: RKT), with a market capitalization of $26 billion, announced the introduction of RocketRentRewards, an unprecedented program in the homeownership sector designed to convert renters’ past rent payments into credits for closing costs on a home purchase. According to InvestingPro data, the company’s stock has shown significant momentum with a 16% gain year-to-date, despite experiencing high volatility.

Homebuyers who secure a mortgage through the company can now receive a 10% credit on their last 12 months of rent, with a maximum benefit of $5,000 to be applied towards closing costs. Given the current national average rent of $1,800, this could mean an average of $2,160 in lender credits for eligible clients, which significantly addresses one of the largest financial barriers for first-time homebuyers. While the company’s financial health score is currently rated as weak by InvestingPro, its strong liquidity position with a current ratio of 6.35 suggests robust capability to support such initiatives.

Bill Banfield, Chief Business Officer and Economist at Rocket Mortgage, emphasized the company’s dedication to facilitating homeownership, particularly among renters who may view the prospect as financially daunting. He stated that RocketRentRewards aims to alleviate these concerns by rewarding consistent rent payments.

The initiative comes at a time when renter households represent over a third of U.S. homes, with a substantial proportion being people of color. Rocket Mortgage’s new offer is particularly focused on assisting these communities, which are projected to account for more than half of first-time homebuyers by 2030.

To utilize RocketRentRewards, homebuyers can verify their rent payments from the past year through documentation of their current rental amount. The credit is then directly applied to the closing costs of their home loan.

This program aligns with Rocket’s Own the Dream campaign, promoting the universal aspiration of homeownership. In support of this goal, Rocket Mortgage also introduced Rocket.com, a comprehensive platform that simplifies the home buying process by integrating property search, purchase, and financing.

Rocket Mortgage has a history of innovation in the mortgage industry, having launched the first fully digital mortgage experience in late 2015. The company has processed over $1.8 trillion in mortgage volume since its inception in 1985 and has consistently received top rankings in client satisfaction by J.D. Power. With revenue of $4.3 billion in the last twelve months and analysts expecting profitability this year, the company continues to demonstrate its market leadership. For deeper insights into RKT’s financial health, valuation metrics, and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro, which provides expert analysis on what really matters for this leading mortgage provider.

For more information on RocketRentRewards and to apply for a home loan, interested parties can visit Rocket Mortgage’s website. This announcement is based on a press release statement from Rocket Mortgage.

In other recent news, Rocket Companies has been in the spotlight due to a series of developments. Following the release of inflation data indicating a rise in yields, Rocket Companies, along with other mortgage lenders, experienced a downturn in share prices. The inflation report has led to concerns about higher mortgage rates, impacting the demand for new mortgages and refinancing, and potentially affecting future earnings for companies in the mortgage industry.

In a positive development, Rocket Companies launched Rocket.com, an integrated homeownership platform. The platform uses artificial intelligence to streamline the home buying process, providing property search, financing, and management tools. The platform is expected to address challenges faced by consumers in the current housing market and provide a more accessible path to homeownership.

Rocket Companies also unveiled a new brand identity, unifying its services under the "Rocket" brand. The rebranding includes the acquisition of Rocket.com and the introduction of a new logo, wordmark, typeface, and color palette. The company aims to engage key demographics, including Hispanic, female, Veteran, and first-time homebuyers, through its new visual identity.

In a strategic financial move, Rocket Mortgage, a subsidiary of Rocket Companies, amended its existing credit agreement with Morgan Stanley (NYSE:MS). The amendment extends the Master Repurchase Agreement’s expiration date and increases the credit facility amount, providing the company with more financial flexibility.

These recent developments reflect the ongoing efforts of Rocket Companies to navigate a challenging economic landscape, innovate its service offerings, and strengthen its financial position.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.