Rent-to-Own Startup Seeks to Help Homebuyers Build Equity

Startup Divvy Homes soft-launched at the end of 2017 with a rent-to-own buying program, offering "the flexibility of renting with the financial benefits of homeownership."

In the program, the homebuyer selects a home for sale, which Divvy then purchases. The buyer typically puts down 2 percent on the home, and then pays a monthly amount including both rental and equity payments. Over time, the equity portion builds credit in the home until meeting the 10 percent equity credit goal within three years, per HousingWire. Divvy allows the resident to buy out the remainder of the home with a mortgage, using the credit as a down payment.

“Housing affordability is a massive problem,” said Raymond Tonsing, general partner and founder of Caffeinated Capital. “We’re excited about bringing a tech-enabled solution to market to help more young buyers bridge the gap between renting and owning. Divvy provides a more flexible homeownership option.”

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