American Tenants Association Unveils “Rent-to-Own” Initiative

Program will help tenants achieve home ownership and relieve banks of “toxic” assets.

The American Tenants Association (ATA) (, the country’s only nationwide residential tenants’ advocacy group, offered solutions today to the nation’s financial crisis that are designed to dovetail with the Obama Administration’s plan to rid banks of “toxic” mortgage assets.

The ATA’s initiative, entitled Performance Based Financing, uses long-term residential leases with purchase options that will have the effect of changing financial institutions’ classification of troubled assets to “performing” from “non-performing” while allowing millions of residential renters the opportunity to achieve home ownership.

Performance Based Financing, a concept created by Stan Dale, a graduate level adjunct professor at Pennsylvania’s Arcadia University and the ATA’s Director of Public Policy, is at its core a “rent-to-own” strategy. Mr. Dale indicated that the plan incorporates Black-Scholes financial options modeling to establish net present value and real options modeling to create a “bid/ask” marketplace for residential properties.

“Banks and financial institutions are being crushed by short sales, foreclosures and deeds in lieu of foreclosure,” Mr. Dale said. “In addition, because of the Financial Accounting Standard Board’s ‘mark-to-market’ accounting principles, paper losses become real losses. This causes bank reserves to be more difficult to maintain and as a consequence credit more difficult to obtain,” Mr. Dale added.

Mr. Dale went on to say that “higher losses mean tighter credit which leads to failures resulting in more losses. It’s a never ending cycle.”

William M. Deegan, the ATA’s Executive Director, said that “Performance Based Financing requires no outlay of federal or private capital” other than the expense of administering the plan. “The Obama Administration’s Public-Private Investment Program, designed to clear banks of toxic assets, will require billions in public and private financings. Our plan, once established and implemented, will allow banks to switch currently non-performing mortgage assets to performing assets in the form of performance valued purchase contracts without requiring a dime in taxpayer funding.”

Mr. Deegan added that “tenants who might not otherwise qualify for mortgage financing will be able to achieve the dream of home ownership” under the plan.

The group indicated that they would present their proposal to Congressional leaders and the Obama Administration in the weeks ahead.

“The beauty of Performance Based Financing is that everyone benefits; tenants, the banks and the taxpayer,” Mr. Dale concluded.

The American Tenants Association serves as the voice for the more than 95 million Americans who rent their homes. Membership is free to all tenants and advocates of tenant rights. Its web and blog address is



Posted On: Scottsdale, AZ April 1, 2009