Kimberly Rudy, a lifelong renter, mother and breast cancer survivor, never thought she’d be able to afford a home. Like many Americans in today’s tight housing market, she struggles to save for a down payment as rent eats into her monthly income. She earns about $42,000 a year, but has been in the same rental house she’s rented for 10 years, pays $1,500 a month in rent, and can’t save enough to buy a home.
“Renting costs you almost every penny you have,” Rudy said. “It’s like you’re punished and forced to pay more rent for something that was never yours.”
This can be especially frustrating for someone who doesn’t move often and dreams of owning a home. In fact, Rudy has lived in the house she rents out for more than a decade, having previously rented at another property for seven years. However, Rudy’s daughter, Anna DeHaven, found a workable solution in 2021, allowing her mom to finally buy a home in her early 50s.
Divi Houseis a rent-to-own home service that helped Rudy start paying about 15 months’ rent on her house before closing. Rudy, then 51, launched the Divvy Homes program in the spring of 2021 after being diagnosed with stage three breast cancer.
Through Divvy Homes, Rudy selected a home in his price range in Rome, Georgia, a small town of about 35,000 people. Divvy Homes then purchased the two-bedroom brick ranch in spring 2021 for $137,000 and rents it out to Rudy for $1,430 a month. The company even made repairs to the 1950s home that the original sellers were reluctant to make, including installing a new water heater, HVAC system and wiring throughout the home.
The difference with buying through the Divvy Homes program is that a portion of the monthly rent actually goes into a savings account that will then be used to pay Rudy’s down payment on the eventual home purchase.
The Divvy Homes program is designed for hopeful homeowners like Rudy who either can’t afford their mortgage payments or don’t have enough money for a down payment and closing costs associated with their home purchase. Prospective homeowners can apply online through Divvy, which asks applicants for financial information and the area they want to buy. Divvy Homes then provides approved applicants with a shopping budget, and customers can select any eligible home on the market through their real estate agent or through Divvy.
Divvy Homes then uses this budget to purchase the client’s home for all cash. In fact, many millennials and other buyers looking to enter the real estate market have been beaten by all-cash offers — some tens or hundreds of thousands of dollars above asking price. This process allowed Rudy to compete in a market that would otherwise have been challenging for her.
“Beyond rent (as part of the Divvy program) and extra money for a down payment on a home, I couldn’t save for the rest of my life,” Rudy said. “Without it, I’d still be renting and I’d be nothing until the grave.”
After choosing the house she wanted, Rudy moved in and started paying the rent. Rudy lived there for 15 months and paid the rent before starting to buy the house from Divvy. Buying the home from Divvy for $147,500 has a mortgage rate of 5.25%, which brings her monthly mortgage payment down to $1,145, well below her monthly rent of more than $1,400.
“There aren’t many liveable homes in this price range on the market. They’re in need of a lot of work,” Rudy said. “If I had just started the process, I probably wouldn’t be able to afford anything because everything was out of my price range,” she adds, reflecting on how the Divvy process has helped her secure housing.
For Rudy, who was undergoing cancer treatment at the time, the process of closing the deal was somewhat murky. (She has since been in remission and is still recovering from side effects of cancer treatment). Fortunately, De Haven, who has years of experience working with mortgage companies, helped her mother through the process.
“The closing process was very simple,” DeHaven said. “We did FHA[Federal Housing Administration Loan]and Divvy had enough down payment to close. She ended up getting her money back.”
Rudy eventually closed the house in August 2022.
“I’m actually saving money and owning the rights to what’s mine. I can do what I want and have something for my daughter, but she chooses to use it after I’m gone,” says Rudy. “Owning a home is so much better. I feel like I’m more connected to the community because I’m an owner and a taxpayer now, so that’s the American Dream.”
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