Real estate startups promise mortgage rates at half the price
A real estate startup is offering homebuyers facing skyrocketing mortgage rates a chance to get the home of their dreams for a fraction of the price.
The housing market has been stuck in limbo for months as the 30-year mortgage rate continues to rise — reaching 7.18% last week, more than double what it was two years ago.
Enter Roam, a platform launched last Wednesday by Uber COO Raunaq Singh that connects sellers who have secured those low prices with potential buyers.
Roam is able to deliver the hard-to-believe deal by trying to promote a little-known alternative solution involving “assumed mortgages,” which allow sellers to transfer their loans to a buyer.
All government-backed loans, which are processed by the Federal Housing Administration and the U.S. Department of Veterans Affairs, can be assumed, Singh said.
“It’s a benefit that the law gives you,” and it’s easier to qualify for, since most FHA loans require a credit score of 580.
However, the conveyancing process is often not enforced, which Rohm blamed on buyers struggling to find homes that qualify for these types of loans when they hit the market.
“Since we are a licensed real estate brokerage, we are able to identify homes (eligible for assumed loans) from MLS (Multiple Listing Service) records,” Singh said.
Roam — which will also advertise homes for sale that qualify for assumable mortgages — takes a 1% fee of the buyer’s closing costs.
Singh told The Post that he came up with the idea for Roam when he was struggling to afford a mortgage on his own.
“I was looking for a house, but every month that passed, the monthly prices went up and the monthly prices went up. In turn, I started looking for more affordable ways to buy a house, and stumbled upon the idea of affordable loans.
He was able to turn this idea into reality by securing $1.25 million in a seed funding round led by venture capital firm Founders Fund and Eric Wu, who co-founded Opendoor, where Singh worked for about four years.
Roam launched with a workforce of 10 targeting 4.4 million government-supported homes in Georgia, Arizona, Colorado, Texas and Florida.
Singh said there has been an influx of interest in the platform, though he declined to provide customer numbers at this time.
“The issue we are addressing here is home affordability,” Singh said, noting that rates above 7% mean that “tens of millions of American families are being shut out of the real estate market.”