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Startups

Divvy Homes (Startups #9)

By June 28, 2021No Comments

YouTube Transcript

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Welcome to Startups. Ready to own your dream home but can’t get a mortgage? Not to worry, as homeownership has never been so reachable.

Divvy will enable a person or family to select a home they’d like to someday own, then helps them to buy that home. The prospective buyer can give as low as two percent toward a down payment. Divvy pays for the rest, then it collects a monthly amount that includes both market-rate rent plus an equity payment.

It’s easy to appreciate why this might be attractive to potential homebuyers who can’t secure a traditional mortgage in the current market, where many of them don’t suffer from poor credit, but are contractors, and/or self employed workers who don’t have the required months of salary stubs to show strict bankers.

Interestingly, when using Divvy, you are required to take a quiz as part of the closing process and also attend a webinar to ensure you understand what you’re getting into. The property must also pass inspection and, of course, you’ll need to sign your l ease and send initial payment with sufficient time to clear before closing. Once i t closes, you’ll be locked into a three-year l ease, with no obligation to buy at the end of the 36-month term.

Over time, you earn “equity credits,” which are like a home savings account. At any time, you can convert those equity credits into a down payment to purchase the property or you can also choose not to buy the home after your three-year l ease ends, at which point Divvy will sell the home and cash out your equity credits.

The nice thing about Divvy is that you have the option to buy the place, or walk away after three years, with most of your money back. You should look at it as a three-year test drive to see if the home, and homeownership, is for you.