TAMPA, Fla — For Zach Jenkins, buying a home in the Tampa Bay area felt out of reach in early 2020.
"I wanted to buy but my credit score needed some work," he said.
And two years later it's impossible for many. But Jenkins says he was able to fix his credit and recently close on his Spring Hill home by joining a "rent-to-own program" through the California-based company called Divvy.
"Kind of looking at the market, it was skyrocketing. So we were able to lock in the house we wanted at a price two years ago," he said.
We sat down with the company's co-founder, Adena Hefets, who explained how the process works.
She tells ABC Action News that after someone is approved, they work with a realtor to find a home in a pre-approved price range, and then Divvy bids on it for you.
If they win, you put down a down payment that's equal to 1-to-2 percent of the cost of the house. Divvy then helps with closing costs and inspections and then sets a rental agreement with you.
"You move in and make one monthly payment, it's part rent part equity and the equity piece builds up your ownership and savings in the property," she said.
Jenkins says those equity payments Hefets mentioned bump up your rent price but adds that in his case it helped him save money he may have otherwise spent.
"The rent that you're going to pay with divvy is higher than what you'd be used to paying because in your rent you're saving for your down payment," he said.
As part of the rent agreement, you also have up to three years to decide if you want to take over the mortgage or walk away with the equity you saved up.
It's a process that can seem too good to be true and Hefets tells ABC Action News she gets it.
"If you're nervous because the history of rent to own has been predatory that's completely the right emotion to have," she said.
She adds that the process doesn't always work for their clients. But to help avoid issues, she says Divvy audits their rental agreements regularly and will work with clients who miss payments, to help bring home ownership a little closer to as many people as possible.
"It's security, it's a place to send your kids to let them grow to save in an asset that's appreciating and to know that you're not doing it alone," she said.