The Rockets waived Lin last December and he was claimed by the Knicks, turning into a breakout star when he landed the starting point guard job. Now with Goran Dragic not expected to return, Houston may want Lin back.
One of the people told The Associated Press on Tuesday the Rockets are planning to make Lin a multiyear offer, though the Knicks can match it and have said they intend to keep him. The people spoke on condition of anonymity because the negotiations were to remain private.
The Rockets liked Lin, but had Kyle Lowry and Dragic ahead of him and needed to open a spot so they could add Samuel Dalembert to the roster. So they waived Lin, a decision general manager Daryl Morey would later write on Twitter that he regretted during Lin's sensational February stretch that made him the biggest story in the NBA.
The undrafted guard from Harvard, the NBA's first American-born player of Chinese or Taiwanese decent, would fit nicely with the Rockets, who remain popular in Asia even after former center Yao Ming's retirement.
But both coach Mike Woodson and general manager Glen Grunwald have said the Knicks planned to keep Lin, who averaged 14.6 points and 6.2 assists in 35 games, 25 starts, before his season ended because of surgery to repair torn knee cartilage.
The Knicks may have to match two offers to keep their starting backcourt intact. Landry Fields plans to sign an offer sheet with the Toronto Raptors that his agency said is worth about $20 million over three years.
The Knicks are looking for veteran point guard help, hoping to land Steve Nash, but they don't want to lose Lin, whose popularity made them fans around the world and had merchandise flying off the shelves at Madison Square Garden. They scored their highest TV ratings in years during the height of "Linsanity."
Deals can't be signed until July 11. The Knicks would then have three days to match.