LEASE PURCHASE REALTOR

Overview

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The opportunity to own a home is financially out of reach for millions of Americans. Experian, one of the three consumer credit bureaus, found that 16% of Americans (that’s nearly 53 million) have credit scores below 580. That would prevent them from getting approved for a mortgage. Instead, they become long-term renters, which currently account for more than 36% of all households. Today, especially after Covid19, the average credit score needed to qualify for a home loan is 640. Divvy Homes is on a mission to change the way this works through fractional ownership. In a nutshell, they act as a non-traditional lender, financing an otherwise unqualified buyer. Their vision: “Instead of paying rent every month, getting no closer to homeownership, we’ll offer tenants the opportunity to build their credit scores, earn equity, and eventually get approved for a mortgage by using a modified rent-to-own arrangement.” Divvy Homes partners with people who want to become homeowners but are unable to get financing. They allow renters to choose a home they’d like to one day own, make a small down payment, move in, and make monthly payments. All of this is done so that the buyer can earn equity in the home over a few years. Within about three years, the renters ideally will have bolstered their credit scores, earned equity in the home, and become eligible for financing.

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At Divvy Homes, we’ve created what we call an “enlightened rent-to-own” program. Here are the characteristics of Divvy that make it fair to our customers: 

 

• Before moving into the home, our customer puts in 1-2% of the value of the home as an initial payment. This money becomes part of their down payment on the home if they choose to buy it later.  

• Our customer can choose a home they like from among homes currently on the market. This gives them plenty of choice in which home they end up living in and potentially owning.

• Divvy buys the home for our customer with an all-cash offer. We are the owner of the home and our customer rents the home from us. As such, we pay for any major maintenance costs that are necessary to make the home livable. 

• Every month, our customer makes a monthly payment to Divvy that includes a savings portion (typically about 25% of the payment). This savings portion goes toward the down payment on the home, if they choose to buy it from Divvy at anytime during their lease term. 

• Our customer gets to move into the home and live in it for up to 3 years. At the end of 3 years of making monthly payments, they would have saved approximately 5-10% of the home’s value and can use this money towards the down payment to purchase the home. 

• Divvy gives their customers a pre-agreed purchase price that they can purchase the home from Divvy after either 18 months or 3 years. 

 

How It Works

  VIEW THE FOLLOWING SHORT VIDEO TO SEE HOW THE DIVVY PROGRAM WORKS

       https://www.youtube.com/watch?v=1sQaatYs7bE 

      Use the following link to apply:

      https://www.divvyhomes.com/a/agentdavidaroze​

      First, a renter applies to Divvy supplying financial and personal information.

 

• Once they’re accepted, they start looking for a home they’re interested in buying in one of the cities Divvy Homes operates in.

 

• Right now, Divvy covers Atlanta, Cincinnati, Cleveland, Dallas, Denver, Fort Lauderdale, Houston, Jacksonville, Memphis, Miami, Minneapolis, Orlando, Phoenix, San Antonio, St. Louis, and Tampa. The renter is free to choose the home they want within their area, including new construction (terms apply)

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• I will work with the Divvy customer support staff to guide you through this process, helping with everything from the home search to final negotiations with sellers.

 

• Once you (the renter) has found a home you want to buy, Divvy will ask you to pay at least a 2% down payment. ***Everything else is covered by Divvy Homes. Including the:

 

• Remaining purchase price

• Closing costs

• Taxes

• Insurance

• The renter can then move into the home and begin making two monthly payments: Rent and an equity, or “savings” payment. Divvy holds the savings payments they receive from the renter.

 

• At the end of the process, Divvy gives the savings back to the renter to serve as their down payment. As long as all other requirements are met, the renter can now qualify for a mortgage and can take over ownership of the home.

 

Divvy Homes Applicant Requirements

 

• Divvy is careful in qualifying applicants who will most likely make payments on time and eventually qualify for a mortgage.

 

• Their screening process is not as strict as a traditional lender, but they do ensure that applicants meet the following requirements to be considered.

 

• Credit check

• Income verification

• Background check

• Proof of down payment

• Two months’ rent

• Photo ID (driver’s license, military ID, or passport)

• Credit Check. When you apply with Divvy Homes, the first thing they’ll do is run a “soft” credit check that doesn’t hurt your credit score. If you’re applying with someone else (a co-applicant), they’ll also be subjected to a soft credit check.

 

• When the Divvy team looks at your credit report, they’re looking for your debt-to-income ratio, how responsible you are with using credit, any missed payments or loan delinquency, past foreclosures, evictions, or bankruptcies, and your overall FICO score.

 

• If your credit report doesn’t contain all the information Divvy needs to proceed, they’ll let you know and may need to run a “hard” credit check (which can impact your credit score) to obtain the information needed.

 

• Income Verification. Divvy looks at your income to determine your eligibility. They want to see that you and any co-applicants are receiving enough income to cover the monthly payments on the home as well as screening to ensure that you'll most likely to be ready to qualify for a mortgage within a few years. 

 

• Proof of Income is shown through W2s from employers, bank and direct deposit information, pay stubs that extend back a few months, and your most recent tax returns.

 

• One of the reasons some people have difficulty getting approved for a mortgage is that their income is hard to prove. Many times, this income is from a small business, self-employment income, or contractor income. Divvy says they may ask for additional financial information and documentation if this is the case for you, but you won’t be automatically disqualified.

 

• Background Check. You will be subject to a background check, including your history as a renter as well as a criminal history check.

 

• Past convictions don’t automatically disqualify you. The Divvy team examines each case individually to determine if you’d be a good fit.

 

• Proof of Down Payment. Divvy wants you to be able to show that you can cover the down payment of at least 2% of the home’s overall value. If you’re looking to buy a home that costs $200,000, the down payment amount you’d need to have in cash at your disposal would be $4,000.

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• Divvy Homes is clear and upfront about their process. They have received lots of good reviews and comments from former renters they’ve helped become homeowners.

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• Link to apply: https://www.divvyhomes.com/a/agentdavidaroze