MONEY & BUSINESS: Real estate startup promises half-price mortgage rates
A real-estate startup is offering home buyers who are facing soaring mortgage rates a chance to land their dream home for a fraction of the price.
The housing market has been stuck in limbo for months as the 30-year mortgage rate continues to climb — hitting 7.18% last week, more than twice where it stood two years ago.
Enter Roam, a platform launched last Wednesday by for Uber operations staffer Raunaq Singh that connects sellers who locked in those low rates with prospective buyers.
Roam is able to offer the hard-to-believe deal by attempting to popularize a little-known workaround that involves “assumable mortgages,” which allow sellers to transfer their loans to the buyer.
All government-backed loans processed by the Federal Housing Administration and the US Department of Veterans Affairs, are assumable, Singh said.
“It’s a benefit given to you by law,” and is even easier to qualify for, as most FHA loans require a credit score of 580.
However, the transfer process isn’t put into practice very often, which Roam blamed on buyers struggling to find homes eligible for these types of loans when they hit the market.
“Because we’re a licensed real estate brokerage, we’re able to identify the homes [eligible for assumable loans] from MLS [Multiple Listing Service] records,” Singh said.
Roam — which will also advertise homes for sale eligible for assumable mortgages — takes a 1% fee from a buyer’s closing costs.
Singh told The Post that he came up with the idea for Roam when he struggled to afford a mortgage himself.
“I was looking for a home, but every passing month, the monthly rates went up and the monthly prices went up. In turn, I started to look around for more affordable ways to buy a home, and I stumbled across the idea of affordable loans.”
He was able to turn that idea into reality by securing $1.25 million in a seed funding round led by the venture-capital firm Founders Fund and Eric Wu, who co-founded Opendoor, where Singh worked for nearly four years.
Roam launched with a workforce of 10 targeting 4.4 million government-backed homes in in Georgia, Arizona, Colorado, Texas and Florida.
Singh said there’s been an influx of interest in the platform, though he declined to provide customer numbers at this time.
“The issue we’re addressing here is home affordability,” Singh said, noting that rates over 7% means “tens of millions of American families are being priced out of the real estate market.”