Real-estate startup, Roam, is offering a solution to home buyers facing skyrocketing mortgage rates. With the housing market in a state of uncertainty, thanks to the continuous rise in 30-year mortgage rates, Roam aims to connect sellers who secured low rates with potential buyers. The platform takes advantage of assumable mortgages, a little-known workaround that allows sellers to transfer their loans to the buyer. This method is applicable to all government-backed loans processed by the Federal Housing Administration and the US Department of Veterans Affairs.
Roam, launched by former Uber operations staffer Raunaq Singh, aims to combat mortgage rates exceeding 7% by identifying homes eligible for assumable loans from Multiple Listing Service (MLS) records. As a licensed real estate brokerage, Roam is able to facilitate the transfer of these mortgages, making it easier for buyers to afford their dream homes. Singh developed the idea for Roam when he himself struggled to afford a mortgage. Faced with rising rates and prices, he began exploring more affordable ways to purchase a home and came across the concept of assumable loans.
In order to turn his idea into reality, Singh secured $1.25 million in seed funding from venture-capital firm Founders Fund and Eric Wu, co-founder of online real estate marketplace Opendoor. Roam launched with a staff of 10, targeting 4.4 million government-backed homes in Georgia, Arizona, Colorado, Texas, and Florida. Singh assured potential buyers that this workaround is not reminiscent of the 2008 housing crisis, as it is aimed at addressing affordability rather than mortgage delinquencies.
Since its launch, Roam has received significant interest, although specific customer numbers have not been disclosed. Singh emphasized that the main issue Roam addresses is home affordability, as rates above 7% have made it difficult for many American families to enter the real estate market. The platform takes a 1% fee from a buyer’s closing costs to facilitate the assumable mortgage transfer.
Roam provides a ray of hope for home buyers struggling with soaring mortgage rates. By leveraging assumable mortgages, the startup offers a solution that can make the dream of homeownership a reality at a fraction of the cost. As the platform gains traction and expands its reach, it has the potential to revolutionize the real estate market and provide a much-needed lifeline for those otherwise priced out.