ORLANDO, Fla. (WCSC/Gray News) – The largest homebuilder in the country is facing a federal lawsuit over claims the company conceals the true monthly cost of purchasing a home.
The lawsuit claims that D.R. Horton works with its preferred lender, DHI Mortgage, to deliberately exclude the full cost of required property taxes from payment calculations.
The suit claims that, by doing this, D.R. Horton can create artificially low monthly mortgage payment quotes that mislead homebuyers into believing their home cost will fit into their monthly budget.
Those homebuyers claim they didn’t learn the actual monthly cost until well after closing, when their monthly mortgage payment increased by hundreds of dollars.
The lawsuit claims this practice allows the company to market its homes as more affordable than competitors’ properties by manipulating the disclosed tax component to make higher-priced homes appear affordable.
One defendant in the suit claims he chose a D.R. Horton home with a promised monthly payment of $2,164.68, but that cost jumped to $3,136.33 when his new mortgage servicer did an escrow analysis that included all his property taxes plus back taxes.
Other defendants claim they were promised a monthly payment of $2,602.47, which they agreed to because they say it was lower than other homes with similar sales prices they were considering.
However, they said the monthly payment increased to $3,439.07 after their new mortgage servicer also did an escrow analysis.
D.R. Horton responded to the allegations, saying, “D.R. Horton and DHI Mortgage strongly disagree with the claims made in this lawsuit, and we intend to vigorously defend against them. D.R. Horton and DHIM have been, and will continue to be, unwavering in our commitment towards transparency with our customers.”
The full lawsuit can be read below:
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