YC-backed Homebase is an alternative to traditional mortgages for home buyers in Vietnam – TechCrunch
Homebase co-founders Philip N. and Junyuan Tan

Homebase co-founders Philip N. and Junyuan Tan

The home ownership rate in Vietnam is around 90%, but many millennials are struggling to join that number. Rising property prices in cities, coupled with a lack of financing options, mean that more people will have to delay buying their first homes until they have family support.

Homebase, part of the latest batch of Y Combinator, was founded in 2019 to give potential buyers in Vietnam to traditional buyers. Homebase works as a co-investor, purchasing a portion of the property with clients, who then have the option to purchase equity from Homebase until they have full ownership, or for their share of the proceeds. Sell ​​property. Meanwhile, buyers rent to Homebase that matches the company’s stake, and have full usage rights to the home, so they can rent it out or rent it.

Co-founders Junuan Tan and Philippe Ann originally started Homebase in Singapore, but decided to focus on Vietnam because Tan lived there, working at their previous startups, Reprise Technologies and Atlantis Lab. Tan wanted to buy a house, but found that bank mortgages also charged high interest rates on short-term loans.

“If you look at the whole of Southeast Asia compared to Europe or America, there are really no other solutions, such as government schemes or rent-to-own financing solutions,” Homebase chief operating officer Philip N. told ClearTips.

Its model is similar to Divvy Homes and Zerodown in the United States and, in fact, leaders of both startups have invested in Homebase (Brian Ma, co-founder of Divvy Homes and Troy Schnaider, former COO of Zerodown). Other backers at Homebase include VinaCapital Ventures, Class 5 Global, Pegasus Technology Ventures, 1982 Ventures, Antler and Darius Cheung, which is 99.co. Is the founder and CEO of.

Most of the transactions at Homebase are currently in Ho Chi Minh City and Saigon, and there are plans to expand to Hanoi and Danang by the end of this year. Finally, Homebase aims to enter other South-East Asian markets where homeowners face a lack of financing options such as Singapore, Thailand and Indonesia.

In Vietnam, about 70% of adults are “unbanked”, meaning they do not have a bank account, which makes it difficult to apply for a mortgage. Some Homebus customers said they use the service because they are unbanked. Other customers have financial accounts, but see Homebase as a faster, more flexible alternative to bank loans.

Its contracts range from one to 10 years, and in the end, customers have the option of buying all the equity in the property or selling it with a homebase so that they can get their investment back. Initially the amount of equity customers also varies. For example, home buyers who are using Homebase as an alternative to a mortgage typically take an initial 20% to 30% stake in the property, while real estate investors often start with a 50% stake.

Homebase finances its stake in assets by working with third-party financial institutions, including private high-net worth individuals and family offices, as an opportunity to diversify its hold into a new asset class lets see. A company is also in talks with a wide variety of funds from Europe, the United States and Singapore, including equity, hedge, real estate loans and emerging market lending.

To screen applicants, Homebase has an internal checklist and onboarding process, and also works with real estate agents, developers and other partners in Vietnam.

For those third parties, Homebase serves as a value-added tool that helps customers close more deals by offering them a way to get financing. Homebase also performs due diligence on potential properties, including examining documentation and permits, and has built an asset valuation model based on existing property data, transaction data, and information from developers.

This appraisal service said Homebase is expanding, an important part of the business as it assures buyers that the company’s incentives are aligned with them.

“We stand to risk our investment,” he said. “Many customers are also first time buyers and they want more help to find a good property.”

By Jothi Venkat

Chief Editor Jothi Venkat Tips Clear In . Editorial chief and CEO of TipsClear.in. Representing many online News sites and Magazines. Having Media company World Wide with a team of Neutral Reporters.

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