An App for That? Tech Promises to Help Young People Afford a Deed

Housing affordability continues to present barriers to first-time buyers. People who already have deeds find this market so much easier to navigate. Only one in five buyers is a newbie.  Far too many younger people feel like permanent renters.

Not surprisingly, property tech companies and app developers are showing up with solutions. And the National Association of REALTORS® (NAR) has been showcasing them. After all, the real estate business isn’t helped when new generations of potential customers are being sidelined by affordability hurdles.

Here’s the tech that’s the talk of the industry now.

Getting the Down Payment Together: Foyer

Saving for a down payment isn’t easy these days. Many first timers won’t be able to save up 20% for the typical home. And then they have to pay higher monthly costs for their home loans, because they’ll be told to pay for private mortgage insurance.

Landy Liu, who has founded a company called Foyer, says hopeful buyers could use “a dedicated place to save for a home.” The Foyer app offers these potential deed holders a customized savings platform, geared to keep them on track.

It’s a subscription service that allows the user to set buying goals and stick to them. Subscribers can watch their credit profile while they save money in FDIC-insured bank accounts. They can accumulate savings rewards for staking their money and commitment through the company.  

U.S. real estate brokers and mortgage lenders also pay into the company in order to be matched with vetted home seekers, and young people who could become buyers in the future, and are seeking expert advisers. Because the app users pay a subscription, the idea is that they’ll stay engaged and not drift away from their goals after one or two initial consultations. It’s the psychology of a gym membership, applied to deed seeking goals.

Foyer is available nationwide, and boasts more than 10,000 users. Some of the customers are parents who purchase Foyer savings accounts as gifts for their grown children.

Pairgap: Cupid for Co-Buyers

Nikki Merkerson, CEO of Pairgap, is setting out to support the growing numbers of friends who buy homes together. It’s a high-tech take on an old story: the tenants in common style of vesting a deed.

Pairgap serves as a matchmaker for co-borrowers who achieve their goal of ownership by combining their resources. The co-borrowers might be friends, relatives, or people who’ve only met because they’re on the platform.

Subscribers can get boilerplate legal agreements so they understand their parts of the bargain. Pairgap describes the agreement as a co-buyers’ “prenup” that keeps everyone aware of their rights and responsibilities.

The company is based in New York City, but it’s fanning out. It provides a platform that can be used by local and regional banks. The institutions benefit by receiving leads to capable, vetted loan applicants.

Neobanc: Helping Renters Become Wealth Builders

Sharon Love-Bates directs the Emerging Technology division of NAR’s Strategic, Business, Innovation & Technology group. “We are in a housing affordability crisis,” Love-Bates observes, and real estate tech can play a helpful role. One of the tech companies NAR highlights is Neobanc.

The Canadian company Neobanc is addressing the pain point of rent—money paid out, lost to someone who already has real estate. Rental payments are in constant conflict with the renter’s ability to save. The rental cycle can lock a potential buyer out of the market for years—sometimes permanently.

Kyle Collier, CEO of Neobanc, says renters can break that cycle. They can build credit and financial strength. This new company is attracting an impressive level of attention—and revenue. So it might just be starting a trend.

Neobanc collaborates with landlords, real estate agencies, and home properties. The company’s payment platform credits rent and utility payments. Users can earn anywhere from 4 to 12 percent on eligible transactions. A percentage is kept aside, to gradually grow into a down payment over time.

Learn more about the gig economy and how it changes mortgage borrowing and real estate ownership with Deeds.com.

Better Home: A Better Way to a Mortgage Approval?

Better Home & Finance Holding Co., a mortgage tech company, now works with the giant crypto platform Coinbase. Together, they’re about to show potential home buyers how to stake cryptocurrency as a way to score a conventional home loan.

Borrowers will be able to use their Bitcoin as collateral for a dedicated loan—just for the down payment. There is no need to liquidate actual crypto assets to stake the collateral. (The digital assets will be held as collateral on the Coinbase Prime platform.)

That’s what makes the Coinbase-Better partnership so appealing. And it’s a breakthrough in another way, too. The loans will be backed by Fannie Mae—the congressionally chartered, shareholder-owned company with $4.3 trillion in assets.

Better Home’s AI tools will let applicants check interest rates, and lock them in with quick pre-approvals. Then, Better Home will originate and service its borrowers’ accounts. Coinbase One members will be eligible for a 1% rebate on the loan total. The new program is set to debut this year. Crypto owners, take note.

A New Generation of Borrowers Shapes Property Tech

Mainly, the younger generations are the target market for these new property tech offerings.

A theme that’s emerging? Fulfilling young buyers’ needs for goal-setting support. A number of the most talked-about platforms engage young people well before they are actually in the position to acquire their own deeds. If they can find ways to build credit, save up, and understand the value of equity sooner, tech companies believe, then younger generations will buy. (The average first-timer is now aged 40.)

Younger mortgage applicants need different tools. They earn money, build credit, and save in ways that differ from the traditional salaried earner’s model. And younger generations are at home with online platforms and mobile apps. While their finances may not always seem straightforward to lenders, many nontraditional applicants do have the ability and the resolve to meet monthly mortgage costs.

Important note: This article is intended as an overview. It is not a recommendation or endorsement of any company. Large purchases, no matter how they might be financed, can and do have tax impacts. It’s important for the mortgage applicant to speak with a tax expert who understands digital platforms.