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If you dream of owning your own home but aren’t quite ready for a mortgage, Divvy could be an ideal option. The company’s rent-to-own business model aims to make homeownership more accessible to individuals with past financial challenges or minimal down payment savings. Here’s a breakdown of everything to know about the company.

What does Divvy do?

Divvy leverages the rent-to-own model to assist future homebuyers get into a home sooner. Instead of coming up with a hefty down payment to buy a house, Divvy will make the purchase for you and help you save up for a down payment over the course of three years. During this time you rent the home from them, with some of each rent payment being set aside for the future down payment. This also gives you time to fix your credit score if needed, so you can get approved for a home loan in the future.

If you choose, you can purchase the home from Divvy at a preset price anytime during the three-year lease period. But you can also decide not to move forward with the purchase when the lease ends, or even terminate the lease early — for a fee.

Divvy for future homebuyers

How does it work?

With Divvy’s rent-to-own program, the company will buy the house you want now and lease it back to you for three years. You can move in right away, and during those three years, you’ll make monthly rent payments that include built-in savings to be put toward a future down payment.

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Here’s a step-by-step breakdown of how the process works:

  • Submit an application: This is done online and does not affect your credit score. Divvy requires a minimum credit score of 550 to qualify.
  • Start house-hunting: If you qualify, Divvy will provide you with an approved home-shopping budget. You can work with one of their agents, or with any real estate agent of your choosing — but the home you select must be in an area where Divvy operates and meet the company’s eligibility criteria. (Heads up: Divvy does not buy condominiums.)
  • Acquire the home: Divvy will make a cash offer on the home you select and move forward with the transaction if their offer is accepted. The home must pass an in-person evaluation, like the home inspection that any buyer would perform. The company covers closing costs and any additional homebuying expenses. But you’ll need to pay some money upfront: an offer deposit of $500, an initial payment of between 1 and 2 percent of the home’s purchase price and one full monthly payment.
  • Move in and pay rent: Once Divvy closes on the house, you’ll be able to move in and begin making monthly lease payments. A portion of each monthly payment will be set aside for use toward your future down payment.

 

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