We’re in the middle of a housing affordability crisis. 50% of renters in America (over 20M households) are cost burdened, spending the majority of their income on rent every month. With median home prices already more than 4x annual income and continuing to rise every year, home prices are running away faster than most can save. The wealth gap between renters and homeowners is unsustainable and we’re quickly becoming a nation of permanent renters not by choice, but by necessity.
At Divvy, we believe in the value of homeownership. The only way to break the cycle and get families onto the property ladder is to rethink housing. What if you could own a portion of a home now instead of waiting years to save up for a down payment? Divvy is a gradual homeownership program that allows you to purchase a percentage of any home (between 2–10%) and buy more ownership over time. You only pay rent on the portion you don’t yet own, and can buy the entire home at any time.
I vividly remember our very first Divvy home purchase. Sarah (not her real name) is a nurse whose mother recently passed away. Sarah had been saving for years to own her own home, but incurred medical debt while caring for her mother and was unable to access a mortgage — that’s when Divvy stepped in. Within weeks we were able to find, compete for, negotiate, and close on a home perfect for her family. It took a lot of work, but I will never forget the gratitude and joy Sarah welcomed me with when I went to visit shortly after closing — her son and boyfriend have always wanted to work on a project together, and the house very conveniently has a backyard shed and patio for them to take on.
We’re very excited to announce that we’ve raised a combined $30M in equity and debt led by Andreessen Horowitz with participation from our seed investors, Caffeinated Capital, DFJ, and Max Levchin, to continue our mission to help families access homeownership.
We get the privilege of buying homes for deserving families every day and it’s a responsibility we don’t take lightly. We are eager to direct our passion, capital, and technology towards creating a world where people who live and work in their communities have a stake in the prosperity of their neighborhood — and with over 2000 applications every month, there’s no shortage of demand for this new way to own.
Reinventing housing to be radically more accessible and customer-first will take a village. We’re excited to lead the charge, but will need the help of real estate professionals, community leaders, capital partners, and governments to succeed. We also believe the only way to scale this massive operation is with technology. We’re pursuing an enormous opportunity to make a lasting impact on how generations after us will live — if you’re as passionate as we are about helping families transition into homeownership, please consider joining us.
Originally posted on Divvy’s blog. Check it out for more great housing posts.