The remaining purchase price, closing costs, taxes, and insurance are all covered by Divvy.Īfter Divvy closes on the home, a buyer enters into a 3-year rental agreement with them. This allows a buyer to get into their home for less than $6,000 in upfront costs. In exchange, the buyer compensates Divvy with a 2% payment of the home’s selling price. Once the home is selected, Divvy pays for the house in cash on half of the buyer. Related> Rent to Own – A Home Buying Option With No Down Payment Required How Does it Work?Ī buyer can select a home from one of the markets Divvy operates in. That means that individuals who may not have enough for a down payment, or are self-employed, or have a low credit score - or simply aren’t sure if they’re ready to own a home in the first place - will still have an opportunity to buy a home through Divvy. But unlike landlords, Divvy defers to the renter to coordinate and make decisions on repairs, giving prospective buyers the opportunity to test out home ownership and learn about what it takes to own a home.ĭivvy offers a path to homeownership by allowing buyers to build equity in a home while still renting it. After the rental term is up, buyers can buy their home.ĭuring the three-year lease period, Divvy covers maintenance and repair costs - just like a landlord would. The buyer then makes rent payments while also setting aside money for a future down payment through Divvy. The company purchases a home on a buyer’s behalf. Monthly payments will likely be higher than with traditional rentingĭivvy Homes is a new way to help homebuyers purchase a home through a rent-to-own model.Missing a payment can significantly impact a buyer’s credit score.Divvy is only available in certain housing markets.Homebuyers enter a 3-year lease with Divvy that can’t be broken.Marlize van Romburgh and Sophia Kunthara contributed. Tech-enabled residential real estate brokerage Compass also went public in April. Other startups in the homebuying space that have raised notable venture funding this year include Doorvest, Propertymate and Rendin. “It just creates a more consistent customer experience to not be using as many third parties and bring a lot of this stuff in house,” she said in that interview.ĭivvy’s funding and growth follows a pandemic-fueled homebuying boom across the country that has also pushed up prices. To date, its customers have exercised their option to purchase at a rate of roughly 40 percent, Divvy said this week.ĭivvy says it now operates in 16 markets and is expanding its footprint in Georgia, Texas and Florida, and works with about 25,000 real estate agents across the country.ĬEO Adena Hefets told Crunchbase News earlier this year that the company also plans to add adjacent homebuying services, such as in-house real estate agents, and title, escrow services and mortgage services. ![]() If a customer decides not to buy the home, they are able to cash out their savings, the company said. Customers then rent the home, with about 25 percent of the monthly payment going toward a future down payment, the company told Crunchbase News in February.Ĭlients can build up to 10 percent of the value of the home over the course of their three-year lease, but are also free to buy the home at any point during the lease. That growth, it said, attracted the attention of its lead investors, who it said “preempted the Series D.”Ĭustomers work with Divvy to find a home, and then the company purchases the home on their behalf with the customer contributing about 1 percent to 2 percent of the home’s value. The company said it has already closed more home sales this year than it did in total between its founding in 20. ![]() Its latest funding comes just six months after it raised a $110 million Series C funding, also led by Tiger Global. The funding reportedly values San Francisco-based Divvy at $2 billion.ĭivvy aims to make homeownership more accessible via a rent-to-own model.
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