{"text":[[{"start":7.55,"text":"Fintech groups are seeking to capitalise on the growing number of Americans who struggle to pay for housing, offering “rent now, pay later” loans as the cost of living pushes up demand for short-term financing. "}],[{"start":19.7,"text":"Affirm, a Nasdaq-listed company that is one of America’s biggest “buy now, pay later” lenders, recently partnered with fintech Esusu to pilot so-called rent-split loans. Three other companies that specialise in these housing loans told the FT that their customer bases were rapidly expanding. "}],[{"start":39.25,"text":"Rent-split lenders cover a tenant’s monthly payment to their landlord and receive the money back in instalments spread over the course of the month, in effect splitting up the borrower’s rent bill into smaller sums."}],[{"start":51.65,"text":"Wemimo Abbey, co-founder of Esusu, said the loans serve a growing number of people who work freelance or gig economy jobs with irregular pay schedules. “People can make [rent payments], it’s just the timing,” he said. "}],[{"start":64.95,"text":"“Recent inflation has been really sticky, but incomes are not going up,” Abbey added. “So that’s what makes us think this is going to be a massive, massive market.”"}],[{"start":73.9,"text":"Rent-split lender Flex said that since the company launched in 2019, it has processed $37bn in rent payments. "}],[{"start":83.2,"text":"The growing interest in offering these loans comes as the US suffers a deepening housing crisis, caused in part by the lack of new home construction as well as four years of high interest rates that have made mortgages more expensive. "}],[{"start":97.85000000000001,"text":"Lower-income renters struggle the most. Of American renters earning less than $30,000, 83 per cent spent more than 30 per cent of their income on rent and utilities in 2024, according to a study published this year by the Harvard University Joint Center for Housing Studies. The federal government considers families that spend more than 30 per cent of their income on housing to be cost burdened."}],[{"start":122.95000000000002,"text":"Buying a home has also become more difficult, with data from the National Association of Realtors showing that the typical age of a first-time buyer has climbed to an all-time high of 40. "}],[{"start":135.3,"text":"US President Donald Trump has made housing affordability a prominent part of his policy agenda ahead of November’s midterm elections, with measures intended to speed up home construction and curb institutional investors’ ability to buy more single-family homes."}],[{"start":150.45000000000002,"text":"“In an ideal world my product gets used less, frankly,” said Andrew Borovsky, chief executive and co-founder of Split Pay, another private lender. “The social contract in this country, you work really hard so that you can buy a house . . . that’s really deteriorating,” he added. "}],[{"start":166.95000000000002,"text":"Consumer advocates say rent-split lenders can make borrowers worse off with hidden fees and high interest rates that trap them in a cycle of debt."}],[{"start":176.00000000000003,"text":"“If you don’t have money to pay rent today, it’s not likely you’ll have money to pay rent later,” said Mike Pierce, executive director of Protect Borrowers, an advocacy group. “It feels . . . like you’re getting on a hamster wheel and you won’t be able to get off.” "}],[{"start":192.20000000000002,"text":"The lenders argue they offer loans to segments of the population that are otherwise underserved and allow borrowers to be financially responsible about managing the timing of their rent bill and pay cheques."}],[{"start":203.70000000000002,"text":"Rent-now-pay-later providers are gaining customers among people who are more likely to live pay cheque to pay cheque. Flex has said nearly 53 per cent of its surveyed renters would have less than three weeks of emergency savings if they lost their source of income. "}],[{"start":218.65,"text":"Flex’s customer base was also composed of people with patchy credit histories whose “options are more expensive ones, such as late rent and overdraft fees, payday loans and subprime credit cards”, said the company’s vice-president of public affairs, Ryan Metcalf."}],[{"start":233.9,"text":"The average Flex customer’s credit score is 602, which is considered higher risk by many lenders."}],[{"start":239.95000000000002,"text":"Split Pay CEO Borovsky said he hoped to launch a credit card for his clients with lower interest rates, based on the knowledge that they pay their rent. "}],[{"start":248.00000000000003,"text":"“I’m really going after the $5tn consumer credit industry that hasn’t changed in 50 years,” he said. "}],[{"start":256.1,"text":"Additional reporting by Akila Quinio in New York"}],[{"start":268.45000000000005,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1781005459_4078.mp3"}