Michael Phillip - Colorado Real Estate

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Divvy Rent-to-Own

 

As of Sept 2023, Divvy released a statement that they are currently putting a pause on their home buying program. They still have some current inventory homes that are available for their rent-to-own program. Please reach out to me for more details or discuss a plan that will get you on the path to homeownership. 

The Divvy Rent to Own program offers Americans a safe alternative form of financing so they can get into their dream home today. Whether you don’t qualify for a mortgage or you are new to the area and want to get to know the area more first, or even just want to try before you buy, this program is perfect for you! Don’t wait to get into your dream home, rates and prices will go up! This program allows you to get your dream home today, while taking the necessary steps to be able to purchase the home within 3 years. And the best part is you know the purchase price ahead of time. That means no negotiations or bidding wards once you are ready to buy!

How It Works

1. Choose your dream home

You can choose any home on the market and Divvy buys it on your behalf, with just 2% due upfront and monthly payments that cover rent and Home Savings. Divvy takes care of the negotiating, home inspection, closing fees, and most of the paperwork.

2. Make it your own

You get to enjoy the benefits of ownership from day one. You’re building equity in the home and the home is your—you can feel free to paint the walls or hang up family photos!

3. Build towards your mortgage

Each month, you will make one monthly payment- of which ~75% is rent and ~25% goes into a “Home Savings” account that goes directly towards your future down payment when you’re ready to purchase the home.

4. You buy back the home from Divvy or walk away with savings

You can buy back the home at any point, using your savings to go towards the down payment or you can walk away and we will cash you out! (minus a 2% re-listing fee).

How To Qualify

  • Minimum FICO of 550
  • Minimum $2,500 monthly income
  • Currently employed or have other steady income sources
  • A maximum monthly debt-to-income ratio of 50% including a potential Divvy Homes payment
  • No evictions in the previous year
  • No bankruptcy in the past year

Check out this introductory video to learn more! 

Divvy Rent To Own Program

The Disadvantages of Divvy

Good Credit

I wouldn’t be an honest real estate agent if I did not discuss some of the major downsides to this program. To begin with, this program is not for those with good credit and savings. If you have good credit and savings, you should be buying a home! Even though you are in this program, until you purchase the home you are still a renter. If you need to review the differences between renting and buying, click on the link to read about the pros and cons of each.

You Must Still Qualify For A Traditional Mortgage

Secondly, if you have bad credit and no savings this program may also not be for you. You will still need to qualify for a traditional mortgage to buy the home within 36 months. What I’ve seen is that most people will not change their habits and take their credit seriously enough to raise their score within those 36 months. And if you do not end up buying the home from Divvy in that timeframe, you may lose all of your down payment!

The Home Must Still Appraise

And lastly, even if you work hard and get your credit up and you qualify for a mortgage, you still may not be able to buy the home! This is because of the appraisal. Divvy gives you a purchase price for the first year that is approximately 6% of what they pay for the home. When you go to purchase the home, your lender will get an appraisal done to make sure they do not lend you more money for the home then it is currently worth. This means if the home’s value does not increase by the same 6%, the lender may not lend you the full amount to purchase the home from Divvy. Then, according to Divvy, you have these options:

  • Submit the appraisal report to Divvy at [email protected] for review and allow Divvy to provide additional comps (if available) to help you contest the appraisal results.
  • At closing, you may pay the difference in price between the appraisal price and your purchase price.
  • If your lender allows you to do so, you may seek a second appraisal opinion and/or seek alternate mortgage financing.
  • Postpone the purchase process, which may allow the home to further appreciate.

Have questions or want to apply? Follow these links:

APPLY NOW. ITS FREE! (click here to start the application)

No application fee

      • You can do co-applicants in order to increase purchase price you may qualify for.

SEARCH FOR HOMES

Due to the fast changing inventory of homes on the market, the homes listed on the Divvyhomes.com website may not be up-to-date, and there may be homes listed on their website are not on the market still. Once you get approved for a rent amount, I will send you the most up-to-date list of available properties and help you with finding your dream home.

CONTACT ME

I’d love to help answer any questions you have or address any concerns. Reach out to me anytime via email, text, chat, or phone call.