Divvy Properties affords rental to buy for Orlando residence possession
Future buyers in the greater Orlando area now have a new option to consider in the area’s busy and competitive real estate market.
What you need to know
- Divvy Homes offers a rental option for new homeowners
- The company buys the house and the customer signs a three-year lease
- Part of the rent goes towards the future deposit
- The customer has the option of leaving after the rental agreement
Divvy Homes, a San Francisco-based startup company, is providing a home rental path towards home ownership for customers. The company will buy a home on behalf of an eligible applicant who will then sign a three-year lease with Divvy.
A portion of the customer’s monthly rental payment goes towards their future down payment for the home.
The customer has the option of moving away from buying the home and paying off these savings minus a new fee at the end of the lease.
“The only goal is to improve home ownership access,” said Adena Hefets, co-founder and CEO of Divvy Homes, which expanded into the Orlando market in December. “Getting a mortgage is now harder than ever, and Divvy offers an alternative way to finance a home.”
In each of its markets, Divvy works with local real estate agents to identify clients who may not be ideal candidates for a traditional mortgage.
Divvy’s requirements are generally more flexible, Hefets said.
For example, Divvy only requires that a customer’s bankruptcy be paid one year prior to filing an application. The general requirement for a mortgage application is four years earlier, Hefets said.
“We’re trying to be a little more flexible and basically be the stepping stone in between when you actually rent out when you actually own the house entirely,” Hefets said.
The strong population growth trends in Orlando were part of what attracted Divvy to this marketplace. Hefets said the company has also had success in the neighboring Tampa market, where Divvy receives around 1,500 applications a month.
Kane Ford from Tampa was one of those applicants. His family moved to their five bedroom Divvy home in December.
“We’re first-time homeowners,” said Ford. “We’ve only rented houses in the past, and I feel like every single home we rent makes the experience a little bit worse and worse.”
Ford said Divvy’s flexible savings structure appealed to him. Using a calculator on the site, users can estimate what their total monthly payments would be based on the house value and the percentage of savings they would like to set aside.
“With five kids, it can be difficult to save for a new home at times,” said Ford. “The way Divvy has structured its program, those savings are built into your monthly payments. So we have to save. Which works really, really well for us. “
Local property manager Chris Bright said hire-purchase programs aren’t very common locally and he hasn’t seen a company similar to Divvy in Orlando.
“After what I’ve seen here, [rent-to-own] isn’t used much at all, ”said Bright.
Bright, owned by Best Orlando Property Management, called rent-to-own programs a “wild-wild-west thing”. He cautioned renters and property owners alike to read the fine print carefully before signing a lease.
“Research, research, research,” said Bright. “Nobody wants to enter into a contract that in the end doesn’t make sense to either party or is unenforceable.”
For his part, Ford said he trusts Divvy and has had a fantastic experience working with the company so far.
“I honestly felt that Divvy was doing this to help people, not just make quick money,” said Ford.
Although he did not use the resources himself, Ford appreciates the opportunities Divvy offers its customers to get credit advice and other assistance. This support is made possible through Divvy’s partnership with Navicore Solutions, a national organization focused on housing advice, loan advice and financial education.
Richard Verrillo, senior housing partnerships manager for Navicore Solutions, said the partnership supports Divvy from other rental programs that are not as careful about whom they accept.
“If you have the neutral, external housing advisor who is here, we will work with you [the clients], Set goals, help them spend the money, save the money, and just have a budget that will make this process work for them, ”Verrillo said.
Verrillo said Divvy’s pre-approval process helps prevent the customer from being “doomed” by moving into a home they definitely cannot afford.
“At no point in our lives are we taught how to buy a house or what we need to buy a house,” Verrillo said. “So we hold her hand throughout the process.”
Ford said his family have every intention of buying their home at the end of their lease.
“Divvy is very flexible,” said Ford. “If you can find a house you like and a house that suits your needs, run with it.”
Molly Duerig is a member of the Report for America Corps, a researcher on affordable housing for Spectrum News 13. Report for America is a not-for-profit national service program that places journalists on local newsrooms to cover undercover issues.