The new offer will save up to 15 percent of the home purchase price for a down payment, helping buyers qualify for expensive homes and avoid private mortgage insurance.
Shared equity platform Point says it will use $115 million in Series C funding to expand its product line to include a down payment product for homebuyers, and to enter new markets outside of its existing 16-state presence.
Founded in 2015, Palo Alto is California-based Point’s leading real estate equity investment (HEI) product that lets homeowners take advantage of up to $500,000 in equity by selling a share of their future home price increases to investors, paying a fee 3 to 5 percent processing, plus independent evaluation cost.
A new product aimed at homebuyers, Sid, will save up to 15 percent of a home’s purchase price for a down payment, helping buyers qualify for expensive homes and avoid private mortgage insurance.
With either product, homeowners can buy back their stock within 30 years without paying a prepayment penalty, usually via refinancing, a home loan or sale. The company also offers a Home Purchase Line of Credit (HELOC) in California.
WestCap led the Series C fundraising drive, which has taken the total amount of equity funding to date to more than $170 million, with current investors Andreessen Horowitz, Ripbit Capital, Redwood Trust, Atalaya Capital Management and Dag Ventures participating. New investors include Deer Park Road Management, The Palisades Group and Alpaca VC.
Eddie Lim
“We have built strong momentum at Point and welcome a vote of confidence from major equity investors in our continued success,” Point co-founder and CEO Eddie Lim said in a statement. “We expect this additional capital to accelerate our growth as we help financially constrained homeowners and homebuyers build financial stability and achieve their financial dreams.”
WestCap is also an investor in single-family residential rental asset manager Avenue One, sustainable home improvement platform GoodLeap and short-term rental platform Sonder.
Point is currently available in Washington, DC, and select markets in Arizona, California, Colorado, Florida, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Virginia, and Washington.
With its new funding, the company plans to expand into 28 markets over the next year.
Last week, equity startup HomePace announced it had secured $7 million in Series A funding led by LENx’s homebuilding arm, LENx, that will allow the company to launch a homebuyer solution to help buyers double their down payment.
Higher interest rates are expected to limit the rise in home prices in the coming months and years. In their April 19 forecast, economists at Fannie Mae said they expect home price increases to ease from a record 19.8 percent during the first quarter of this year to 3.2 percent by the final three months of 2023.
HomePace CIO Jeboah “Bo” Joerg told Inman that this isn’t necessarily a problem for common stock companies.
“There is a general consensus that calming home prices might be good for the market,” said Jörg. “If you’re in the long game, it’s probably better to be slow higher than to keep rushing up” until prices collapse.
Homebuyers looking for help with a down payment can also use tools provided by an Atlanta-based company, Prepayment Supplier, which tracks programs offered by state housing finance authorities and other providers.
The down payment resource integrates data about program benefits and eligibility criteria with MLSs, lenders, agents, and major research sites like Zillow.
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