Startups That Offer New Paths to Homeownership

Some new startups have thus emerged to offer new paths to homeownership:

Divvy buys homes with cash on consumers behalf. The buyers only pay ½% down and move in for a 3-year lease.

Flyhomes buys the home for you with cash. The Consumer can move in immediately and pay Flyhomes daily rent until the mortgage comes through (2 to 3 weeks).

Divvy makes most of its money from rent, but also from the appreciation of the home at sale.

ZeroDown - $30M in equity led by Sam Altman/Goodwater + 100M debt with Credit Suisse.

This is designed to help a buyer’s bid stand out: because offers are all-cash, they’re accepted 68% more than the average bid. Flyhomes makes money from commissions paid by sellers.

Divvy - $180M raised with a16z/Caffeinated/Max Levchin.

Millennials, in particular, face steep obstacles to homeownership because of student-loan debt/low savings.

Divvy charges monthly rent, with 20% of the payment going toward equity to buy the home. After 3 years, the consumer will own 10% of the home, which is enough to qualify for a mortgage. If individuals decide not to buy the home, they walk away with 10% of the sale.