Rent-to-own startup Divvy Homes expands to South Florida
A quarter of monthly rent payment goes toward a down payment
Rent-to-own startup Divvy Homes is expanding to Miami and Fort Lauderdale.
The company, which buys homes and then leases them back to renters for a period of three years, is also launching in Denver, Houston, Jacksonville, Minneapolis and Orlando, according to a release.
The renter contributes 2 percent of the purchase price after Divvy Homes buys the property, and one quarter of each subsequent rent payment will go toward the down payment for the house at the end of the three-year period. Renters can buy the properties before the period ends, or walk away from the house and cash out of their savings.
Divvy said demand for its platform has increased as people began spending more time at home during the pandemic. The company said it will work with local real estate agents to acquire the homes.
San Francisco-based Divvy launched in 2017 and has raised nearly $200 million from Singaporean sovereign wealth fund GIC, Lennar, and venture capital firm Caffeinated Capital. With the new markets, it will be in 16 cities, including Tampa, Phoenix and Atlanta.
Startup Knock recently expanded into South Florida with its home lending program, Home Swap. The program pre-funds mortgages for home purchases, allowing sellers to close on their new homes before selling their old ones, freeing up a liquidity problem.
Build-for-rent housing is also making a comeback, as many would-be first-time homebuyers rethink their plans due to a growing sense of unease about the future.