Loftium touting success with unique approach for home buyers
Feb 20, 2018, 11:42 AM | Updated: 4:22 pm
(File, Associated Press)
(File, Associated Press)
Eric and Raphaella faced a challenge as they tried to purchase a home in Western Washington. They spent about two months on the market, considering FHA loans, finding 3.5 percent for a down payment.
RELATED: Seattle startup uses Airbnb to cover down payments
“Seattle is growing super fast and we were like, ‘How are we going to be able to afford a home here?’” Raphaella told Seattle’s Morning News on KIRO Radio. “Because the rental market is really frustrating, too. You feel like you are wasting your money with a rental.”
Then Eric spotted an article about Seattle-based lender Loftium in a newspaper. It wasn’t long before they got the keys to their new home in Burien. But the $410,000 home comes with a catch — they have to let strangers stay over.
“We do provide them with a microwave and a coffee maker, so it feels like a home, not like a hotel room. More cozy,” Raphaella said.
More specifically, Loftium covers the down payment for qualifying home buyers who, in turn, open up a bedroom to rent on Airbnb.
“In our case we actually got a whole spare ADU, so we have a whole mother-in-law unit on the property,” Eric said.
Loftium
Eric and Raphaella are among a slew of new homebuyers working with Loftium, which offers up to $50,000 for a down payment. Home buyers leave a room open for rent on Airbnb for 12-14 months. The company is able to calculate how much money can be made off the room in order to cover the down payment.
“The response has been overwhelming,” said Loftium co-founder Yifan Zhang. “At this point, we have signed up over 1,500 home buyers in the Seattle region in that last couple months.”
Zhang says that the unique approach to home buying is proving to be an attractive option as the hurdle to purchasing a home in the region is getting steeper. Zillow reports that it will take a single person more than 17 years to save up enough money for a down payment. For couples, it will take about 7.5 years.
“It’s very difficult to save up a down payment … especially if you are young, especially if you are single, even couples are struggling with this problem,” Zhang said.
