Startup Divvy Homes soft-launched at the end of 2017 with a rent-to-own buying program, offering "the flexibility of renting with the financial benefits of homeownership."
In the program, the homebuyer selects a home for sale, which Divvy then purchases. The buyer typically puts down 2 percent on the home, and then pays a monthly amount including both rental and equity payments. Over time, the equity portion builds credit in the home until meeting the 10 percent equity credit goal within three years, per HousingWire. Divvy allows the resident to buy out the remainder of the home with a mortgage, using the credit as a down payment.
“Housing affordability is a massive problem,” said Raymond Tonsing, general partner and founder of Caffeinated Capital. “We’re excited about bringing a tech-enabled solution to market to help more young buyers bridge the gap between renting and owning. Divvy provides a more flexible homeownership option.”
Advertisement
Related Stories
Innovation
IKEA Model Home Aims to Ease the Trauma of Homelessness
Blending innovation with empathy and eco-conscious design, IKEA US unveils a pioneering model home in its Live Oak, Texas, store
Affordability
How Much Income Do First-Time Buyers Need to Afford the Average Home?
The median-priced home is unaffordable in 44 of the 50 largest U.S. metro areas
Affordability
What Is the Relationship Between Urban vs. Suburban Development and Affordability?
A new paper from Harvard's Joint Center looks at whether expanding the supply of suburban housing could, in turn, help make dense urban areas more affordable