Seattle Startup Aims to Use Airbnb to Cover Down Payments

Seattle Startup Aims to Use Airbnb to Cover Down Payments
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Loftium will pay up to $50,000 toward a down payment for people willing to offer their home to strangers for up to three years.

Jack Byram
  • 28 september 2017

Loftium, a new Seattle startup, is setting out to make the prospect of owning a home a more tangible possibility for many people. The company offers to pay up to $50,000 for a down payment on a home with the understanding that the homeowner will pay at least one percent of the down payment and will also list an open room in the home on Airbnb for 12-36 months. The room must be available to be rented for at last 357 days of the year and Loftium can require that as much as two-thirds of the profit be paid back to the company. The opportunity is currently available only in Seattle and the down payment is exclusively offered to mortgages supplied by Umpqua Bank.

With Loftium, the homeowner is expected to have the room prepared within thirty days and not just any room will be accepted; there are standards that are expected to be met in order for the room to be considered eligible. For example, the room must be able to fit a queen-size bed and standard furnishings. However, the owner can rely on Loftium to supply basic necessities such as an automated keypad lock, bedding and toiletries.

Loftium Home Owner Airbnb.jpg
To promote the simplicity and accessibility of the agreement, Loftium points out that hosts can spend as little as fifteen minutes a week managing the listing, and this is in part attributed to things like automated messaging and smart pricing. The homeowner must also enable the “Instant book” feature which means that all potential guests are approved. While that may scare some homeowners, Loftium does allow up to three vetoes on potential clients per year.

In terms of how the agreement works exactly, Loftium uses an algorithm to predict how much money there is to be made by a certain home, and it uses this number to determine how much it will offer for a down payment. For many people this may appear to be a dream come true as it offers an opportunity to buy a home and on top of that the home owner’s risk is diminished as he-she is not expected to pay the money back if the room does not seem to be selling. This lends itself to the danger of scammers tweaking the Airbnb listing to make it less desirable so that they never have to have strangers inside their homes. However, the opportunity to use this for sabotage is limited by the fact that the agreement with Loftium says that the company must be listed as a host so that it is able to access and see the Airbnb profile. This way Loftium can monitor the interactions with guests and see the guests’ responses and feedback on their stays. Furthermore, Loftium maintains the right to have the money paid back in addition to a termination fee if the homeowner is not following the agreement.

Loftium New Home Down Payment Airbnb.jpg

While it is currently limited to Seattle, the startup has hopes of expanding beyond that to Washington D.C., Chicago and other cities within the next year.

Loftium

Loftium, a new Seattle startup, is setting out to make the prospect of owning a home a more tangible possibility for many people. The company offers to pay up to $50,000 for a down payment on a home with the understanding that the homeowner will pay at least one percent of the down payment and will also list an open room in the home on Airbnb for 12-36 months. The room must be available to be rented for at last 357 days of the year and Loftium can require that as much as two-thirds of the profit be paid back to the company. The opportunity is currently available only in Seattle and the down payment is exclusively offered to mortgages supplied by Umpqua Bank.

With Loftium, the homeowner is expected to have the room prepared within thirty days and not just any room will be accepted; there are standards that are expected to be met in order for the room to be considered eligible. For example, the room must be able to fit a queen-size bed and standard furnishings. However, the owner can rely on Loftium to supply basic necessities such as an automated keypad lock, bedding and toiletries.

+Airbnb
+cities
+financial services
+Frictionless Transaction
+home
+hospitality
+retail
+seattle
+startup
+travel
+USA

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