Introducing Balance
Losing a home is one of the worst things that can happen to a family.
We last witnessed this in the fallout from the 2008 Financial Crisis. Today, as coronavirus forbearance programs have ended and inflation hits home, we again find the economy on the brink. Millions of American homeowners are just a few missed payments away from losing their homes — no matter how much equity they’ve worked to build.
Balance is working to change this. For some families, staying in their current home is more affordable than moving to a rental. However, it’s simply not an option once they fall too far behind.
Often, it’s an unexpected life event that sets someone back — a health issue, an extended job search, or the need to care for a loved one. These events can come as a surprise and are often temporary, but they can kick off a spiral of unpaid bills, late fees, and rising debt that’s difficult to escape from.
Facing foreclosure, many homeowners will be forced to sell their home to protect their investment. However, selling is expensive, with fees often adding up to 5–10% of a home’s value. Selling under these circumstances is also emotionally unsettling. Nobody wants to be uprooted from their home — to leave behind memories, to change schools, or to say goodbye to their neighbors and community.
Balance is a more flexible and affordable way to own a home. We replace lenders with co-owners (that’s Balance 👋) and replace debt with equity co-ownership.
We start by paying off a homeowner’s mortgage and other high-interest debt in exchange for an ownership share of their home. As a true co-owner, we also share in customary expenses like taxes, insurance, HOA, and necessary repairs.
This breaks our homeowners out of a downward debt spiral by drastically reducing their monthly debt payments. It gives them a fresh start and the cashflow needed to rebuild their credit. Importantly, the homeowners we partner with remain in control — they get to stay in the home they love and can sell, move, or refinance at any time.
Co-owning with Balance has core principles that drive better outcomes. Here’s how we’re different:
- Incentive-aligned — Debt is zero sum: When things go wrong, homeowners have to fight with the lender over a fixed piece of the pie. Balance wins when our homeowners win. When something unexpected happens, as co-owners we are incentivized to take a longer-term view to find an outcome that works for everyone.
- Flexible — Debt has fixed terms: Everything is agreed upon up front, with very little room for unforeseen circumstances. Changing a loan amount or terms usually requires refinancing a mortgage entirely. Balance is flexible and responsive by design. It’s why our homeowners have the ability to pay with equity instead of cash, and can elect to buy back part or all of their equity at any time.
- Holistic — Debt is transactional: A lender will look at the homeowner’s historical data and make a decision. After the homeowner closes, the mortgage loan is sold to a third party and the lender moves on. Balance uniquely considers a homeowner’s (and the home’s) past, present, and future, along with their entire financial picture. Balance works hard upfront to make sure every homeowner has a clear path back to a traditional mortgage, and we endeavor to stay with them every step of the way.
What’s in it for Balance? Unlike a traditional mortgage, we share in the future appreciation (or depreciation) of the property’s value, which gets paid whenever the homeowner decides to sell or go back to a traditional mortgage. This way, we only do well when our co-owner does, and we’re invested in each other’s success.
We believe that Balance has the potential to help hundreds of thousands of families stay in their homes with the flexibility to get back on their feet. Our mission is to help these homeowners avoid foreclosure or forced sale.
We’re already making a dent
Since the beginning of 2022, we’ve supported dozens of families. Here are two of their stories:
April was out of work in 2020 when the chain of hair salons she managed temporarily closed, forcing her to take on debt to stay afloat. By 2021, she was earning more income than ever, but the spiraling debt she incurred during her income disruption kept her family trapped. Balance invested in her home by paying off her mortgage, a high-interest car loan, and other credit card debts. Within six months, her credit score recovered by more than 150 points, and she was able to repurchase Balance’s interest in the home and transition back into a traditional mortgage loan.
“We were able to pull out money, pay off debts, take a deep breath, and get caught up.” — April
Julie was stuck. Unable to pay a lump sum needed to exit forbearance, she was scheduled to lose her home to foreclosure. With Balance, she avoided foreclosure and paid off her lender, along with more than $22,000 in student loans, personal loans, and credit card debt. She began saving more than $600 a month on payments — a true financial reset.
“Now I feel like I’m on this path where I’m going to be OK.” — Julie
Meet Balance
Balance is a growing team of optimists, technologists, and problem solvers — who’ve spent collective centuries building real estate, lending, and software products and operations. We’ve seen how technology and financial inclusivity can drive life-changing outcomes. Now we choose to build for families who need it most.
Across Seed and Series A rounds, we’ve raised over $25 million in equity and $50 million in debt to build Balance for the long term. We’re fortunate to be supported by some of the most ambitious and innovative partners in the world, led by Alexis Ohanian, Katelin Holloway, and the entire team at Seven Seven Six, alongside Sam Altman & Apollo Projects, Moore Capital, Liquid2, Broadhaven, Cambrian and many more founders, individual and institutional investors.
Today, we’re focused on homeowners who are unable to qualify for a traditional mortgage refinance. Our vision is a better path for all homeowners that replaces debt with equity and mortgage lenders with co-owners.
If you’re a homeowner who’s looking to pay off your existing mortgage and other debts, tell us more and we’ll get you a free proposal today.
If you’re looking to support our mission to save homeowners from bad outcomes, reach out anytime at hello@balancehomes.com.
💜 ~ The Balance team
