Posted 01/30/2018

by Aly J. Yale

Aly J. Yale is a mortgage and real estate writer based in Houston. Connect with her at or on Twitter

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New start-up changes rent-to-own game, opens door to homeownership for millions


Aly J. Yale

The Mortgage Reports Contributor

Renting to own your dream home

Just because your credit score is low, you’ve got lots of debt or your income is less than predictable doesn’t mean homeownership is out of reach just yet. In fact, thanks to a new real estate start-up called Divvy, you could own the home of your dreams in just three years.

Verify your new rate (Jul 19th, 2018)

Reinventing rent-to-own

A new spin on the rent-to-own set-up, Divvy allows potential home buyers to move into their dream home early – long before they’re in the financial place to afford it all on their own.

Rent-to-own homes: Move in now, buy later

Here’s how it works: the buyer picks out any home on the market, and Divvy purchases it outright. The buyer pays 2 percent down, and on a monthly basis, makes a payment that goes toward both rent and equity in the home. The goal is for the buyer to have 10 percent equity in the property in three years.

After three years is up, the buyer has the option to buy the home and take out a mortgage on the rest of the balance. They can use their existing equity in the property as a down payment.

According to Raymond Tonsing, founder of Divvy investor Caffeinated Capital, the new start-up should help solve America’s growing affordability issue.

“Housing affordability is a massive problem,” Tonsing said. “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.”

Verify your new rate (Jul 19th, 2018)

The benefits of tech

But Divvy doesn’t just ease the process of buying for many cash-strapped Americans. It also streamlines the typically burdensome mortgage process by leveraging technology from start to finish.

Lenders may never again ask you for pay stubs, W-2s, or bank statements

According to Divvy investor and Paypal co-founder Max Levchin, this use of tech could even improve pricing for Divvy’s buyers.

“Real estate is an industry plagued by manual processes,” Levchin said. “The technology Divvy is building around application processing, underwriting, and managing these homes will allow Divvy to scale operations and provide better pricing to consumers compared to traditional institutions.”

Divvy is currently operating in Cleveland and Atlanta and helps about 200 buyers every week.

Get today’s mortgage rates

Want to gauge where you’re at in the home buying process? Shop around and see what rates you qualify for today.

Verify your new rate (Jul 19th, 2018)

Aly J. Yale

The Mortgage Reports Contributor

Aly J. Yale is a mortgage and real estate writer based in Houston. Connect with her at or on Twitter

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

2018 Conforming, FHA, & VA Loan Limits

Mortgage loan limits for every U.S. county, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA)