Updated: 1:08 p.m.

Tea party Sen. Mike Lee (R) was forced to sell his Utah “dream home” in a short sale and now lives with his wife and three children in a rental, the Salt Lake Tribune reported.

The newspaper said that Lee’s mortgage lender, JPMorgan Chase, agreed to take a loss on the home, which sold for $720,000. Lee bought the home in January 2008 for $1.1 million, when he was a lawyer making hundreds of thousands of dollars a year, the paper reported.

Lee had intended to sell the home because of his lower $174,500 Senate salary, but prices dropped. And then his former law firm, which owed him a substantial sum, went belly up. Lee lost his down payment.

“It certainly is something that is painful to go through and I know a lot of people are going through it, and I feel for those who have had to go through it,” Lee told the paper.

“It’s not fun. It’s not something any of us would have chosen. But you do what you have to do when income doesn’t match your outlays. You have to pare your outlays down,” he added.

Lee, who called the house their “dream home,” said the family knew losing it might become necessary but was “willing to take the sacrifice for the opportunity to serve in the Senate.”

Brian Phillips, a spokesman for Lee, noted that at the time he purchased the house it was well within his budget and he had not yet decided to run for office. Phillips said Lee immediately took steps to sell the home once he was elected.

Lee has made balancing the federal budget a top priority; he offered a budget resolution that would do so in the next five years by slashing federal spending. Lee also has been a strong proponent of a strict balanced budget amendment to the Constitution.

And he has strong views on boosting housing demand.

Lee introduced a bill in October with Sen. Charles Schumer (D-N.Y.) aimed in part at boosting housing by granting visas to foreigners who invest at least $500,000 in residential real estate.

“This bill supports a free market method for increasing demand for housing at a time when so many working-class Americans are underwater on their homes, are desperate for prices to rise again, and big-government programs have failed to work,” Lee said in a statement when the bill was introduced.

While running for the Senate in 2010, Lee called for eliminating the Department of Housing and Urban Development and said there was no constitutional basis for Congress to involve itself in housing. He’s also repeatedly charged that President Barack Obama’s stimulus efforts made the housing market worse.