What do you think?

A local developer has approached me with an idea of theirs and would like some feedback. I offered to post their idea, and ask your opinions of it. Here goes...

A new home has been built in the city - 2000 sq. ft., maple, granite, wired for home theatre, all the good stuff. Rent would be set at $2500 / month. After one year, the renter would have the option of using their rent paid during the year ($30000) as a down payment on the purchase of the home. The home has an asking price of $500k. If the renter provides an additional $30000 for the down payment, the developer will borrow the renter an additional $40000 (at a 9% interest rate) for down payment. Total down payment would then equal $100k. As this is 20% of the purchase price, the purchaser qualifies for a conventional mortgage.

What do you think?