Mortgage rates have fallen to historic lows during the Covid-19 pandemic. This is 2.5%.
The rates skyrocketed a few years earlier – in 2023, the national average 30-year fixed mortgage APR as of April 1 is still 6.84%.
Whiplash leaves many people trying to buy homes that have been locked out of the market.
But what if there was a way to get the interest rates from a few years ago? There may be a mortgage that can be expected. The expected mortgage is that unpaid loans can be transferred to the buyer.
New York-based startup Roam has a mission to have access to “thousands” homes with mortgages that can be envisaged nationwide.
CEO Raunaq Singh, who worked in products at Opendoor for three years, founded Roam in September 2023. Roam helped to promote $200 million worth of home sales for “several hundred” buyers in 2024. Though Singh did not disclose the tough revenue figures, Roam told TechCrunch that he would charge each buyer 1% of the purchase price. Doing mathematics means 1% of the $200 million will lead to revenues of $2 million in 2024.
Singh claims that the expected loan can save up to 50% on monthly payments compared to current mortgage rate purchases.
Singh says the seller’s shares must be redeemed, and Roam admits that he has built a product that “can allow buyers to get a blend rate of 5% (or less than or less).”
For example, he said that in a home with a selling price of $420,000, in which the seller has a 2.25% interest rate and a $135,293 shares, the buyer does not need to bring the full amount as a down payment.
“We’ll bring in 20% ($84,000) and get the remaining $51,000 gap finance, receive a 3.45% mix rate, and save hundreds of thousands of dollars,” Singh said. “As long as you qualify for an FHA or VA loan, you are eligible to undertake a Roam mortgage. If you do not qualify for a Roam home, you cannot buy a home.”
Today, the startup operates in 17 states, including Arizona, California, Florida, Texas and North Carolina. There are plans to become nationwide by the end of the year, and Singh hopes Roam will see $1 billion worth of home sales promoted by the platform in 2025.
It may sound ambitious, but Keith Rabois, managing director at Khosla Ventures, is leading Roam’s new $11.5 million Series A finance, and considers the startup to be the “future of the housing market.”
“There’s an affordable housing crisis in America, and Roam is the perfect company to deal with it,” Rabois told TechCrunch.
Investors who are on Roam’s board as part of the Series A Round pointed out that they knew Singh and other members of the Roam team since their founder days at Proptech Company Opendoor, which Rabois co-founded with Eric Wu in 2014 (Wu is also Roam’s Angel Investor and is also part of Series A.)
“Working with them previously, I was excited by the possibility that they could alleviate the housing affordability crisis. “Most businesses offering to help consumers save money help save hundreds of dollars a year, but Roam can save over $200,000 in their lifetimes of loans to 30% of Americans.”
Additionally, the existing Backer Founders Funds are participating in Roam’s Series A. In particular, according to Singh, the rounds were gathered a week after the startup began the raise process.
“We held a pitch meeting on Monday, we had our term sheets on Tuesday and signed by Friday,” he told TechCrunch only.
Since its establishment, Roam has raised a total of approximately $16 million in three rounds. The latest round represents three times the part of Rabois. In September 2023, Roam raised $1.25 million in the pre-seed round, led by Rabois when he was at the Founders Fund. Wu, Culdesac CEO Ryan Johnson and #Angels founding partner Jana Messerschmidt also participated in the round.
Then in May 2024, he raised a $3 million seed round. This is also led by Rabois and is still part of the Founders Fund. Other investors in that round include Doordash founder Tony Xu, Figma founder Dylan Field, and emerging founder Paul Gu. The startup has not disclosed its ratings.
How it works
Historically, according to Singh, if buyers search Zillow for possible mortgages in cities like Houston, they will have little or no results.
“Sellers and listing agents know they have a mortgage that they can expect, so they don’t think they’ll promote it,” he said. In Roam, he claims that buyers can find mortgages that can be assumed to be over 2,000 in Houston alone, listed for sale today.
And even if the buyer knows that the seller has a potential loan, according to Singh, it could take up to 45 days to get the assumption approved.
“Falling through because it’s not approved was extremely painful for sellers as they had to relist the home. “With Roam, buyers can get pre-approval before submitting an offer. This dramatically increased the acceptance rate of Roam buyers of offers.”
Singh also claims that Roam will speed up the process of becoming a homeowner.
“Without roaming, it would take 180 days to close the expected mortgage,” he said. “On roam, it’s 45 days.” And what if Roam doesn’t close in 45 days? Pay until you pay the seller’s mortgage.
The company also ensures that all sellers are free from liability, and any subsequent payments made or not made by the buyer will not affect the seller’s credit.
Currently, Roam has 12 employees. According to Singh, the startup aims to avoid linear growth in personnel, with staff increasing 2.5 times the year-on-year increase compared to a five-fold increase compared to the previous year.
“We found that this product allows for revenue growth without linearly increasing variable costs,” he told TechCrunch.
The chance is there, Shin believes.
“$1.4 trillion in the fully anticipated FHA/VA mortgage that occurred in 2020 and 2021,” he said, citing a Consumer Financial Protection Bureau (CFPB) document. “One of the three homes born or refinanced during these low years was qualifying for that opportunity.”
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