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Halo, a company that provides renters a pathway to ownership, announced in a press release it has raised $450 million to broaden its national reach. Churchill Real Estate led the round and was supported by existing investors.
The company was founded in 2016 and is currently operating in Atlanta, Georgia, Phoenix, Arizona, Charlotte and Raleigh-Durham, North Carolina and Nashville, Tennessee.
The recent cash infusion is expected to fuel expansion into 25 metros by Q1 2022.
Halo’s SFR2O, or “single-family rent-to-own” platform, offers aspiring homeowners the opportunity to own based on their future propensity to financially manage a mortgage, instead of their current economic position.
In practice, clients choose a home from a market’s current MLS inventory for Halo to purchase. Customers become tenants in the home until the appropriate time comes to become its owners, based on what Halo calls “a custom mortgage qualification plan.”
Upon acceptance of Halo’s offer on a listing, clients pay 1.5 to 3.5 percent to finalize the transaction before move-in.
The program can assist renters who have down payment funds but poor credit as well as renters who need more time to secure a down payment. The transition period from rent to taking over as owner is between 12 to 36 months, according to Halo’s website.
“We will now be in a position to extend the dream of homeownership to thousands of aspiring buyers who are being left behind by the traditional mortgage process,” David Sandmann, HALO’s founder and managing partner, said in the press release.
“Home equity is the leading contributor to generational net worth, and this new funding will allow us to further our deep commitment to educating and empowering more tenants to become homeowners,” he said.
Halo’s services include the all-cash purchase of the property, ongoing financial guidance and when needed, credit consulting.
Additionally, real estate agents can leverage Halo when clients are unable to qualify for a mortgage. The company pays commissions per each market’s standard buyer fee.
Divvy Homes offers a similar model, and it announced a Series D funding round of $200 million earlier this month. It raised $110 million in a Series C round in February, 2021 and is now valued at $2 billion.
Have a technology product you would like to discuss? Email Craig Rowe
Craig C. Rowe started in commercial real estate at the dawn of the dot-com boom, helping an array of commercial real estate companies fortify their online presence and analyze internal software decisions. He now helps agents with technology decisions and marketing through reviewing software and tech for Inman.
