Ford said, Divvy has “avoided the worst abuses” of an industry that has grown in popularity since the 2008 financial crisis. The company hopes to convert about half its renters into homeowners by the time its first round of leases expires.įrank Ford, a senior policy adviser with the Western Reserve Land Conservancy who has focused on housing issues in the Cleveland area, said that would be a considerable accomplishment, since Divvy’s clients often lack good credit histories. With the backing of investors like the Silicon Valley venture capital firms Andreessen Horowitz and Caffeinated Capital, as well as a Singaporean sovereign wealth fund, Divvy has grown rapidly, now renting more than 1,500 homes in nine markets, including Atlanta, Cleveland, Cincinnati, Memphis and Phoenix. Since it was founded in 2017, Divvy has earned acclaim as a member of a vanguard of companies aimed at people who have been cut out of traditional lending. In walking away from the home, he added, “we don’t get anything to show for that,” he said. “We are going to pay about $55,000 in rent over three years,” Mr. Heavy spending in recent years meant they needed more time to assemble a down payment, and by buying early in their lease they netted a $10,000 discount. He and his wife, Pam, closed on their home 15 months ahead of schedule, for $172,000.
Alexander, a teacher in Atlanta, couldn’t be happier. The pains and the progress Divvy has made are typified by the experiences of two educators in two cities. And the company has been involved in several dozen eviction cases, although many were eventually resolved or stayed because of eviction moratoriums put in place as a result of the coronavirus pandemic. In one area, Divvy is as likely to have sold to an outside buyer as to the tenant who picked out the home. Some clients complain of high costs and maintenance problems. Nash, have closed on their homes ahead of schedule and see Divvy as making good on its promise of offering a new path to homeownership.īut Divvy is also showing a few of the industry’s familiar warts. Its first round of three-year leases will soon expire, and those clients must make buy or back-out decisions.