Not only has the rent-to-own model resonated with lower-income prospects but also younger people and former homeowners who want the flexibility of a try-before-you-buy option and like the idea of a three-year commitment rather than a 30-year commitment.įor the approximate 36% of Americans who are renting, Divvy Homes presents a new option to enter homeownership by granting them access to the home they choose while gradually building equity and a down payment over three years or less. More people are self-employed or have income that’s difficult to underwrite, and most Americans don’t have tons of savings accumulated, so there’s a hole in the market where traditional lenders just aren’t able to keep up with the needs of modern Americans to get into homeownership,” says Dan Strickland, Head of Divvy Brokerage. “Not everyone has a W2 job that they’ve been in for a number of years. Realizing the tremendous challenges faced by so many prospective homeowners, Divvy Homes is helping those left behind by the traditional mortgage process find the path to home ownership through a reimagined rent-to-home business model. Coupled with college debt and low credit scores, all of these factors have largely barred a huge swath of Americans from purchasing. Home prices are soaring, and, in many cases, incomes aren’t able to keep pace.įor many lower-income or first-time home buyers, raising a down payment and qualifying for a loan presents insurmountable barriers to entering the market.Īccording to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index, in the 1st quarter of 2021, Los Angeles homebuyers earning income on par with the local median income of $78,700 could afford no more than 11.6% of the homes on the market.Įven financially solvent would-be buyers with nontraditional income sources can have trouble gaining entry into homeownership with rigid underwriting guidelines and 20-40% down payment requirements. Inventory is tight, and mortgage rates are rising. The path to homeownership has never been more challenging. With Homeownership Out of Reach for Many, Divvy is Delivering the American Dream to Renters in 16 Markets Across the U.S.
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