Digital mortgage company Tomo entered the Dallas, Houston and Seattle markets today, aiming to help homebuyers compete with larger investors.
Greg Schwartz and Carey Armstrong, former Zillow executives, are the co-founders.
The firm will originate Fannie Mae and Freddie Mac loans. Tomo’s emergence comes at a time when institutional investors have flooded the single-family housing market, edging out smaller buyers. The company would not disclose loan amounts it provides. The Federal Housing Finance Agency said the maximum conforming loan amount for a Fannie- or Freddie-backed mortgage in 2021 would be around $550,000.
Stamford, Connecticut-based Tomo also connects homebuyers with brokers who can help move an offer to the top of a seller’s pile to help with closing, Schwartz said in an interview.
It joins a growing field of competitors including Blend, which streamlines mortgage applications; and Better.com, an online mortgage lender.
Last fall, Tomo raised a total of $70 million in two funding rounds. In October, it secured $40 million in seed funding, led by Ribbit Capital, Zigg Capital and NFX, whose co-founder, Pete Flint, sold Trulia to Zillow for $2.5 billion. Zillow co-founder Spencer Rascoff was also an investor in the round. Around the same time, Schwartz was among the investors in a funding round for Rascoff’s second-home startup, Pacaso.
Tomo raised another $30 million about a month later, a spokesperson said.
The three cities Tomo is entering have been among the hottest housing markets in the country.
The firm says its platform allows buyers to get pre-approved and underwritten for a mortgage faster than a bank could do, and aims to cut the 47-day-average closing time in half. The company said that given a clear title and credible appraisal, a home purchase will close on time.
“It’s meant to give you reassurance that if you go into a really competitive situation against an investor or something, you can go ahead and make an offer with confidence,” Schwartz said. “Our team will actually call the listing agent to market you as a buyer and your financeability.”
Tomo’s website does not provide details about its services, listing only its investors and leadership team. It explains its name, which was “inspired by Omotenashi, a Japanese service philosophy in which needs are anticipated and thoughtfully met.”