The venture capital community unlocked the taps merely six months later with a Series D round of $200 million, the result of which was a valuation of $2 billion. A $43 million Series B followed about a year later, and then in 2021, a Series C round closed for $110 million. In 2018, two years after its founding, Divvy announced a Series A round of $30 million. The company itself has expanded rapidly and contracted slightly.Īn avalanche of funding came quick and heavy. Divvy stepped up in place of traditional financing.” As a result, families were locked out of home ownership opportunities during a global pandemic - a time when they needed safety and shelter most. “During COVID-19, new mortgages became difficult to secure as banks tightened underwriting requirements for approvals. “At the start of the pandemic, we made a commitment to help and support as many future homeowners as possible,” Adena Hefets, co-founder and CEO of Divvy Homes, said in a press statement after the most recent funding announcement. So, where does this market leave the “almost-qualified?” Sellers are avoiding selling because of the risk of not being able to buy, and even well-qualified buyers in need of financing are pushed aside by investors and cash-rich buyers. “That carried over into the first month of 2021, when double-digit home value growth was observed for the first time in nearly eight years,” the author wrote. Inman reported that home-price growth in January 2021 soared by 10 percent year over year, a growth rate unseen since 2013. And the amount that makes up that 20 percent grows with every quarter of growth. īanks are seeking 20 percent down and above average credit scores. “In a year when nothing is normal, owning a single-family home has become less affordable to average wage earners across the U.S., despite conditions that would seem to point the opposite way,” said Todd Teta, chief product officer with Attom Data Solutions, in a statement about Attom’s Q3 2020 housing market report. Perhaps that’s what’s needed most of all.Įven anecdotally speaking, Divvy’s market is huge, especially in light of ever-growing home prices. While technology continues to underwrite the real estate transaction rapidly, making the “work” of buying and selling easier, Divvy streamlines the human side of the transaction. The company is a vocal advocate for more people’s ability to own homes and executes its advocacy while keeping the agent in mind and the buyer a priority. Not everyone is a credit risk and not every mortgage application decision should be black and white.Ī qualification line must be drawn but why can’t it be etched in pencil?ĭivvy, founded in 2017, wants to help aspiring buyers whose economics need a slight push to tilt the scale in the right direction. It should be easier for people to gain access to the market. Homes have become more commoditized than ever before. Why should a financial hiccup upend a person’s ability to qualify for a mortgage? And why should the repercussions of generational housing discrimination continue to hamper the economic viability of those long separated from it? “We believe the mortgage industry hasn’t kept up with changing times,” its website states. So let’s have a look.ĭivvy’s mission is rooted in trying to minimize the ever-growing girth of America’s homeownership gap. However, Divvy’s supportive, formalized approach to it isn’t something we’ve seen before. The following Inman Handbook on Divvy will introduce you to a company that has capitalized on a what was once a niche landlord tactic to entice renters on the cusp of ownership: lease-to-own. For many, power buyers, co-ownership companies and buy-before-you-sell startups applied a cooling salve to the searing heat of the housing market.
Thankfully, real estate innovators emerged to offer alternative pathways to homeownership. In fact, it even separated those who could buy as cash-offer battles often left those who needed financing in the same barge as leaseholders. The pandemic-infused buying craze widened an already yawning gap between those who could buy and those who have to rent. This story was updated with new information on Thursday, September 29, 2022įor far too many Americans, traditional homeownership is objectively out of reach, making many question its very role in the American dream. Join us for Mortgage and Alternative Financing Month. We’ll also explore emerging alternative financing options that are changing the game for buyers and sellers. This month, we’ll talk to mortgage leaders about where the market is headed and how products are evolving digitally to suit buyers’ needs now.
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