Real Estate

Divvy launches new product aimed at homeownership readiness

The platform helps prospective buyers get mortgage ready through credit monitoring and financial action plans

Proptech startup Divvy is starting 2024 with a new product launch. Known for its rent-to-buy product — which provides homebuyers with an all-cash offer and allows them to rent a property until they are ready to buy — the company is launching a homeownership readiness program, DivvyUp, according to an announcement on Wednesday.

“We spent a lot of time talking to our current customer base and trying to figure out exactly what they needed, and what they wanted to feel more supported from Divvy,” CEO Adena Hefets, a 2020 HousingWire Rising Star, said.

“We went through a whole bunch of user research interviews, and where we came back to was that customers wanted more support in the process of getting into homeownership. They wanted to understand their credit, they wanted to understand their debt-to-income ratio, they wanted to understand how to build their savings, and they wanted education.”

With these customer needs in mind, Hefets and her team set out to create DivvyUp. When a customer enrolls, the platform has users complete an onboarding questionnaire to help Divvy understand their homeownership goals and financial situation. Divvy then uses this information to calculate the user’s homeownership readiness timeline, giving the user insight into different factors that impact their readiness, including down payment savings, credit score and debt-to-income ratio.

“It is very aligned with our mission,” Hefets said. “It provides a foundation to help our current customer base and future customer base be able to feel like they are being supported with more than just a rent-to-own program, but something that will really guide them step by step through an action plan of how to get mortgage ready.”

DivvyUp provides users with a personalized action plan of steps they can take to get approved for a mortgage. The platform’s homeownership readiness calculator also allows users to figure out ways to shorten their homeownership timeline, or to see how actions like paying down debt or saving more each month could impact their timeline.

According to Hefets, real estate agents can register with Divvy. If they send a customer to DivvyUp, the company will then contact the agent to let them know when the buyer is ready for homeownership.

So far, Hefets said the feedback on DivvyUp has been positive and the product has a waitlist of more than 16,000 customers. The platform is currently available to users in Arizona, Colorado, Florida, Ohio, Minnesota, Missouri, Tennessee and Texas, and it costs $14.99 per month after a five-day free trial.

“There are a lot of personal finance apps out there, but I feel those cater to the tech community more than the average American, who just wants to take a quick glance to see where they are good financially and what they need to fix, along with the steps to take to improve it,” Hefets said. “The price point is also well below that of other credit repair programs.”

Looking ahead, Hefets said the company is planning to expand the footprint of DivvyUp, with possibilities that include budgeting modules and a mortgage marketplace.

“We are at the start of what is going to be a massive product build,” Hefets said. “I think this is a first iteration of what we are ultimately trying to get at.”

After what Hefets describes as a “really tough year” for proptech firms in 2023, she is grateful that Divvy is still standing and able to continue innovating and launching new products.

“It hasn’t been easy,” Hefets said. “We went through multiple rounds of layoffs that were painful and there were many late nights where I went through every single line on our P&L looking for excess costs. But we took swift action to make sure that Divvy survived, and we are fortunate that this experience made us a lot stronger and more resilient.”

Hefets said the firm has spent the past year making sure it is running an efficient business. It is building out core products and infrastructure like DivvyUp that will help customers achieve their home purchase goals.

“Even during the darkest days with Divvy, I kept thinking that we can’t fail because we have customers relying on us,” Hefets said.

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