Home affordability hit a 33-year low this past summer, as high demand and prices were made worse by rising mortgage rates. The housing affordability index, calculated by the National Association of Realtors, has slightly improved in recent months, but rising interest rates and economic uncertainty can leave first-time homebuyers feeling hopeless.
Landis, a NYC-based startup, launched in 2018 with a tech-enabled solution designed to help renters become homeowners. The startup, which raised $165 million last year, will continue to grow its platform with $40 million in fresh funding, which the company announced on Tuesday.
The Series B round was led by GV, formerly known as Google Ventures, and joined by Sequoia Capital, Jay Z’s Roc Nation fund Arrive, the National Association of Realtors’ Second Century Ventures and others.
Landis helps prospective first-time homebuyers by purchasing a home on their behalf and handling all of the appraisals, inspections and paperwork. The soon-to-be first-time homebuyers then rent the home from Landis for up to two years, with a portion of the rent money going toward a down payment fund.
Once the users reach their financial goals, they can purchase the home from Landis, and all closing costs are covered by the down payment fund. The new homebuyers will then transition to making monthly mortgage payments instead of rent payments.
Landis will allocate $2 million of its recent raise to beef up its coaching program, which mentors users as they work toward saving for a down payment and improving their credit history.
“We have proven there is a meaningful place for Landis in the American housing market,” Landis co-founder and CEO Cyril Berdugo said in a statement. “I’m thrilled that GV, along with many of our existing investors, sees the exciting opportunity ahead of us. This enables us to open the door to homeownership for more people while expanding our first-of-its-kind coaching program to provide our clients with the support they need to reach homeownership.”
