Divvy Homes, a Silicon Valley-based startup that aims to boost homeownership in the U.S., recently expanded into St. Louis, Missouri. The expansion comes after the real estate startup captured $43 million in financing earlier this fall.
Divvy said it was drawn to expand in St. Louis because of its low unemployment, new housing stock and stable home values.
“We loved the economy. We thought that the fundamental drivers of housing prices were strong and finally we loved home quality,” said Divvy Homes co-founder and CEO Adena Hefets.
The company’s platform includes an application process that creates a budget for consumers and connects with a local real estate agent. When the prospective buyer finds a home they’d like to purchase, Divvy initially buys home while the prospective owner puts up a modest down payment. About 25% of the prospective buyer’s monthly rent payment then goes toward a larger down payment, providing the occupants the chance to buy the home in three years.
In the St. Louis region, Divvy Homes plans to operate in the City of St. Louis as well as St. Louis, Jefferson, Franklin, St. Charles, Warren and Lincoln counties.
“Our goal is to help create homeowners,” said Hefets. “Mortgages were built 85 years ago, and we just think it’s about time we do things a little bit differently. I think what we provide is a little bit more flexibility in how to gradually get into a home.”