The broader problem is lack of housing that can be afforded by the non-wealthy, which is caused in significant part by zoning laws. If more housing was available, the increased supply would better match the demand.
It's also caused by the idea that housing should be an asset to make someone else money, rather than solely a place in which a person/family can live. This leads to the AirBnB culture, the landlord culture, and compounds inequality whilst driving unaffordability. I'm sure the idea is abhorrent to the USA, but perhaps removing incentives to be a landlord at every step should be considered... mortgages should be puniti…
You can't have a right to housing without taking away the right to property.
Renters are a Group that are already unprofitable to lend to, so banks would reject most and hike rates higher for the rest.
Your proposal only makes sense if landlords provide no service, but this isnt true. Just like how a bank makes a % interest for taking risk and providing capital that owners wont, landlords do the same thing. Landlords get paid a profit to take on risk and long term liability (to the bank), and again provide capital.
In short, banks loan cash to landlords because they are more credit worthy and take on liability. They in tern loan a home to renters, who have worse credit and much less liability.
It is all about paying a premium for others to take financial risk.