H&R Block, the largest US tax arranger, is to sell its beleaguered subprime mortgage lending business for significantly less than it had previously hoped to an affiliate of Cerberus Capital, one of the world’s largest hedge fund and private equity firms.

H&R Block has been trying to sell its lending unit, Option One Mortgage Corporation, since November last year. It has already scaled down operations at Option One by closing several branches and cutting staff.