SAN FRANCISCO– October 12, 2021 – Divvy Homes, a market leader in the proptech industry, today announced that it has entered into new debt facilities totaling $735M. Combined with $200M raised two months ago from the Series D, Divvy Homes is well-capitalized to pursue its mission of making homeownership accessible to everyone. This debt financing will allow Divvy Homes to provide more Americans with a path to homeownership through its innovative three-year program.The funds will be used to refinance two existing debt facilities and provide substantial incremental capacity to buy new homes, supporting Divvy’s 10-year goal of helping more than 100,000 families become financially responsible homeowners.
Divvy Homes is defining a new path for Americans to become homeowners. Historically, Americans only had two choices: rent or buy their homes. The real estate industry hasn’t evolved to meet the new economy, serving only a fraction of the people who want to own a home. Divvy provides a third option that helps customers save for a down payment while living in their dream home. By unlocking market demand, Divvy has closed more homes in 2021 than in the four years since its founding and doubled its market share in the last 10 months. More than 750,000 Americans have applied for Divvy’s homeownership program since 2017.
“Securing this additional debt capacity, along with a substantial reduction in our cost of capital, allows Divvy to continue scaling homeowner accessibility for more Americans,” said Tom Egan, CFO and head of capital markets, Divvy Homes. “We are grateful to our lenders, including Barclays, Goldman Sachs, Cross River Bank, LibreMax Capital and Brigade Capital Management, for their continued support in helping Divvy grow its portfolio. This milestone means Divvy can continue to meet growing market demand and respond to our customers’ home buying needs.”
Millions of people have been excluded from homeownership due to challenges such as imperfect credit, uneven income, or little savings. COVID has exacerbated this trend driving up the cost of US homes. More Americans – including nurses, healthcare technicians, teachers, firefighters, and 1099 workers – have been forced to put their dreams of homeownership on hold. Through Divvy Homes, more Americans now have the opportunity to work towards owning their own home and building generational wealth.
“We are thankful for our lenders’ support in helping us enable homeownership for more Americans. There is no question that there’s an urgent need to solve our country’s housing challenges,” said Adena Hefets, co-founder and CEO of Divvy Homes. “Divvy offers an alternative to those caught in the middle—those who don’t have enough savings for a down payment but are financially stable enough to afford a monthly payment on a house. Our success is our customers’ success. Divvy customers who have completed their lease have exercised their option to purchase their homes at a rate of approximately 40% – well above the conversion rates of our competitors.”
Divvy Homes’ innovative program also encourages long-term financial stability. Its customers often save far more than their peers tucking away an average of $8,200 in savings. This is ~10x the median savings of renters in America, according to a 2017 study by the Joint Center for Housing Studies of Harvard University.
To learn more about Divvy Homes, please visit www.divvyhomes.com.
About Divvy Homes
Divvy Homes is on a mission to make homeownership more accessible to American families. The
program is currently available across 16 major US metropolitan areas: Atlanta, GA; Cincinnati, OH;
Cleveland, OH; Dallas, TX; Denver, CO; Ft Lauderdale, FL; Houston, TX; Jacksonville, FL; Memphis, TN; Minneapolis, MN; Miami, FL; Orlando, FL; Phoenix, AZ; San Antonio, TX; St. Louis, MO; and Tampa, FL. Divvy Homes is backed by Andreessen Horowitz, Caffeinated Capital, GGV Capital, GIC, JAWS Ventures, Lennar, Moore Specialty Credit, SciFiVC, and Tiger Global Management. Divvy Homes was incubated in Max Levchin’s startup studio HVF and co-founded by Adena Hefets, Nick Clark, and Alex Klarfeld.
How it Works
Divvy Homes uses technology and a human-centric approach to partner with customers at every
step of the home buying process, with the goal of helping renters transition into homeowners.
Buying a home with Divvy Homes starts with a five-minute application that results in an approved
home-buying budget and shopping with a real estate agent.
Once the customer finds their dream home, Divvy Homes purchases the property, while the renter
contributes an initial 1-2 percent of the home value towards their down payment savings.
Up to 25% of each subsequent monthly payment goes toward saving for a down payment, setting
customers up to apply for a traditional mortgage when they are ready. A customer builds up to 10
percent of the home’s value over their three-year lease, but they can buy the home at anytime. If a
customer changes their mind, they can walk away from the home and get cashed out for their
savings. Divvy Homes provides the flexibility of renting with the freedom and wealth-building power
Updated on 6/27/2022 to clarify that the customers who have exercised their option to purchase is as a percentage of those who have completed their lease.
Kelley McCormick, Divvy Homes