This is not only not new, but is the standard model for how home loans work in Islamic finance.
Since Islam forbids collecting interest, Sharia-compliant banks and lending institutions instead buy the asset (in this case, a house), and lease it out to the would-be borrower on an installment basis until a predetermined sum has been paid. At that point, ownership can either remain with the bank (but with zero installments) or transition to the would-be borrower.
About the only thing Arrived seems to be doing differently is allowing homeowners to change houses without affecting how much they're paying towards any house - in other words, you're really purchasing a subscription to a collection of homes.
I find this latter concept intriguing, but hard to reason about competitively. Wouldn't the subscription price point have to be higher than interest on a single home loan to offset the average cost of all of these houses?
Since Islam forbids collecting interest, Sharia-compliant banks and lending institutions instead buy the asset (in this case, a house), and lease it out to the would-be borrower on an installment basis until a predetermined sum has been paid. At that point, ownership can either remain with the bank (but with zero installments) or transition to the would-be borrower.
About the only thing Arrived seems to be doing differently is allowing homeowners to change houses without affecting how much they're paying towards any house - in other words, you're really purchasing a subscription to a collection of homes.
I find this latter concept intriguing, but hard to reason about competitively. Wouldn't the subscription price point have to be higher than interest on a single home loan to offset the average cost of all of these houses?