Roam Introduces 2nd Mortgage Program to Reduce Down Payments and Enable 50% of Americans to Access a Home With a 2% Mortgage
May 09 2024 - 12:05PM
Business Wire
Roam secures $3mm in additional financing
from Founders Fund and expands to 35% of the U.S.
Roam, the platform for making homeownership 2x more
affordable through assumable mortgages, has introduced Roam Boost
to make mortgage assumptions accessible to millions of more
Americans.
With the typical Roam buyer saving $12,000 per year compared to
buying a home with a conventional mortgage, and closing in only
45-60 days, purchasing a home with an assumption has never been
easier. But, one issue has been holding hopeful homebuyers back –
finding the cash for the down payment.
Today, Roam launches Roam Boost to enable millions of hopeful
homebuyers to get a mortgage as low as 2% while lowering the down
payment requirement to just 15%. Roam Boost gives buyers the option
to add a second mortgage through a partnership with lender Spring
EQ, helping buyers achieve a blended rate typically between 4-5%.
According to the NAR, which tracks median homebuyer down payments,
Roam Boost now puts the assumable mortgage opportunity within reach
of 50% of homebuyers.
Assumable mortgages are a type of home loan that allows a
homebuyer to take over, or assume, the existing mortgage terms from
the seller. All government-backed loans (e.g., FHA and VA loans)
are eligible for assumption by law, comprising about one-third of
mortgages in the U.S.
When assuming a mortgage, the seller is completely released from
the mortgage, with all liability for the mortgage transferring to
the buyer, and the buyer must also cover the seller’s equity in the
home. That means the buyer must pay for the difference between the
purchase price and the outstanding balance on the seller’s mortgage
at closing. For homes with significant appreciation or a lower
mortgage balance, this can mean a sizable down payment.
With today’s launch of Roam Boost, buyers who need support with
the down payment can browse listings on the Roam website and use
the Roam Boost calculator to determine the blended rate and monthly
payments based on their desired down payment amount. For example,
buyers interested in purchasing a $400k home could use Roam Boost
to put 20% down and receive a Roam Rate of 4.3%, where they would
save more than $500 per month compared to a new traditional
mortgage at 7.5%.
“We’re thrilled to help more buyers take advantage of the
assumable mortgage opportunity by addressing a key pain point of
mortgage assumptions – the down payment. Our mission is to make
homeownership 2x more affordable for 1 million Americans in this
decade. As we continue to expand to new markets, Roam Boost and our
partnership with Spring EQ is a key part of bringing that mission
to a broader base of potential buyers," said Raunaq Singh, Founder
& CEO of Roam.
“Our mission at Spring EQ is to deliver the most cost-effective
home equity financing solutions to the market, and our partnership
with Roam is a great example of how we’re bringing that to life for
more homebuyers”, said Joseph Steffa, Executive Chairman of Spring
EQ. "We're excited to expand the Spring EQ product offering to a
new market thanks to our partnership with Roam."
Today Roam also announced it has expanded to additional markets
including Tucson, AZ, Jacksonville, FL, and Chicago, IL. This adds
to over a dozen existing markets where buyers, sellers, and agents
can benefit from Roam’s full-service platform. Roam now services
35% of homes with FHA and VA loans in the U.S.
Roam has achieved a typical closing timeline of 45 days, a
testament to the company’s reliable service, deep expertise, and
relationships with servicers to ensure assumptions are processed on
time. The company also recently introduced the Roam Seller Closing
Guarantee to give sellers peace of mind when accepting an offer
that includes a mortgage assumption. If the assumption doesn’t
close in 45 days, Roam will pay for the seller’s mortgage until it
does.
Keith Rabois who led Roam’s pre-seed financing round as a
partner at Founders Fund, also led the latest seed round along with
new investors Tony Xu (DoorDash CEO), Dylan Field (Figma CEO), Paul
Gu (Upstart co-founder), and Gokul Rajaram (Pinterest and Coinbase
Board Member).
“Roam has seen significant traction since launching last year
and has proven that sellers, buyers, and agents need the product.
They have just unlocked an even larger buyer pool by addressing the
down payment challenge through their second lien partnership,” said
Keith Rabois, now a partner at Khosla Ventures. “We’re excited to
double down on our investment in Roam to help more Americans take
advantage of the most affordable opportunity to purchase a home
today.”
To find out when Roam will be available in additional locations,
buyers, sellers, and agents can visit withroam.com, enter their
location, and sign up to receive a notification when the service
becomes available.
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