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Rent-to-own company Divvy is offering a new program for aspiring homebuyers called DivvyUp, designed to provide a holistic approach to preparing for ownership, a March 13 press release stated. The new offering is more about “homeownership readiness” than mere credit repair or financial worthiness, the company said.
DivvyUp will offer personalized, long-form action plans that revolve around applying for and tackling a mortgage, focusing on what’s most critical in earning approval and going beyond the company’s initial rent-to-own transition model. The company said it has 16,000 people on the waitlist for DivvyUp.
In a phone call with Inman, Divvy founder and CEO Adena Hefets said that this unique consumer need is an ideal opportunity for software to advance what the company has already created.
“This is the number one thing our customer asked for,” Hefets said. “They said, ‘You guys help us pay for the down payment but not anything else, you don’t help us with credit, you don’t tell me what I need to change on my credit cards, or my installment loans.’ We heard that, and figured out a way to do that.”
Adena Hefets, CEO of Divvy Homes, at ICNY 2020. | Credit: AJ Canaria of PlanOmatic / Inside Real Estate
Hefets said that this is the kind of help the industry’s customers need to really make a dent in the new homebuyer sector, and of late, it’s a role more embraced by fintechs than proptechs or direct industry practitioners.
“This is an MVP product,” Hefets said, meaning it’s a minimum viable product, the first step to solving a bigger need. “I think there’s so much more we need to do.”
DivvyUp engages users in a mobile experience designed to capture personal and financial data to be integrated into the plan’s steps, breaking down goals into manageable, palatable narratives and overlapping granular financial moves with the bigger picture.
The application offers a number of data sets and calculators to help customers see where each dollar is going in relation to the down payment. There are color-coded timelines, clear economic indicators and intuitive action plan content to provide customized insights.
The next stages of the product include a more direct interface with user bank accounts and other instances where a person’s financial data is used. Hefets said they can offer deep levels of hands-on oversight to assist their customers along the path of earning and leveraging a down payment.
In uncovering the need, Divvy surveyed 2,000 consumers who were not yet homeowners in addition to current Divvy users, agents and previous applicants to pull apart what makes buying a home so challenging and, often, emotionally overwhelming. It found that many have doubts about the process of buying, that it’s financially out-of-reach and credit-score restrictive.
The company cited 2022 research by FreddieMac that found credit scores remain the biggest barrier to ownership, and its own survey revealed that over half of respondents believe it takes at least three years to save for a down payment.
“We cannot deny this has been a tough year for homeownership and the housing industry in general,” the company said in a statement. “So, we took a step back and turned to our customers to understand how else we could support them on their homeownership journey. We learned that now, more than ever, our customers are looking for a roadmap that provides a path they can follow to improve their financial profile and eventually own a home; so we set out to build this for them.”
Divvy, founded in 2017, wants to help aspiring buyers whose economics need a slight push to tilt the scale in the right direction. The company is a vocal advocate for more people’s ability to own homes and executes its advocacy while keeping the agent in mind and the buyer a priority.
While technology continues to underwrite the real estate transaction, making the “work” of buying and selling easier, Divvy streamlines the human side of the transaction, something Hefets said was always the true intent of the company.
“I used to offer customers totally custom financial reports, kind of on the side, for fun,” she said. “There are some big-name consumer financial assistant companies out there, but they’re really general, and credit repair companies are really expensive. We just really want our customers to feel supported.”
