Cincinnati Startup Gives Power to First-Time House Hunters

How Homebuyer takes a people-first approach to mortgage lending

Buying a home is one of the bigger decisions most people make in their lives. It’s a challenging process that can be daunting even for those who have invested time into research and preparation. But for first-time home buyers, it can be even more intimidating. Who should you trust? Where can you find a good rate? Where should you start? These are the kinds of questions Cincinnati startup Homebuyer wants to help answer while guiding people looking for a home.

“Homebuyer is a mortgage lender made for first-time buyers,” said founder Dan Green. “Other mortgage lenders are trying to be all things to all people; they take transactions where they can get them. That’s the business: maximizing transactions. But first-time home buyers are a different group of consumers with different and specific questions and needs that don’t always fit into the traditional mortgage model. We’re building a technology-forward company specifically to help this overlooked segment of the market.”

Green is a software developer who spent 17 years in mortgage lending. During his time in the industry, he watched as the dynamics of the industry changed. The 2.5 million first-time home buyers every year are increasingly looking to the internet and non-traditional resources to learn the ropes and are less attractive to lenders because they require more work and hands-on guidance. That puts people who need the help most at a disadvantage.

“Consumers are doing it themselves; they’re finding homes on websites or apps and searching Google to answer questions like, ‘How much home can I afford?’” Green said. “Eventually, there comes a point where the self-help runs out and you’re frustrated in this no man’s land. A mortgage lender doesn’t want to talk to you because they just want to give you a rate and complete a transaction and a realtor can’t answer your questions. There’s a gap there, especially for first-time buyers who aren’t getting the time or attention they need.”

Using his knowledge of the industry, Green founded The Mortgage Reports in 2004. The blog was designed to help homebuyers and also served as a lead generator for lending companies. It was acquired by Full Beaker in 2014, and Green wanted to keep helping the homebuyers he had gotten to know. He founded Homebuyer to give people personalized mortgage advice using intelligent algorithms that deliver useful, effective content that leads to better help throughout the entire home-buying process.

“I saw the real good we were doing for people when we could help them understand how to take the next step and get into home ownership,” he said. “For many people, home ownership is more than just owning a house; it’s a way to lay down roots and a means to generational wealth. I fell in love with sitting face-to-face with people and seeing their dreams coming to fruition. I wanted to provide this education to people so they could make better decisions.”

The startup recently attracted $1.4 million in investment from a group of private investors in December and has partnered with a federally chartered mortgage bank in May that allows them the backing they need. But Green said the company isn’t focused on fundraising. Instead, the focus is on growing responsibly and offering affordable rates to the demographics they’re trying to help. Unlike lenders who prioritize more lucrative deals, Green wants to remain faithful to the ordinary first-time buyer.

“Lower income families are being overlooked, not because they’re not good customers but because it takes just as much work as it does for a very high-value loan,” Green said. “So we don’t pay our loan officers commission. Our team makes money based on the number of families we’re helping, and that’s at the core of what we’re doing. We’re all focused on the same idea of helping as many families as we can, regardless of who they are.

Homebuyer’s staff is remote and Green has experience and connections all over the country. But he chose to start the new project in Cincinnati because it provided exactly the type of environment he was looking for in a startup. Homebuyer also launched a co-working space in Cincinnati’s OTR neighborhood. Green said it’s a good time to be in the startup game in Ohio.

“This is an incredibly supportive community, and you get out as much as you put in,” he said. “The leadership in the area is very strong and it’s a great culture to build a company. There’s an abundance of talent and it’s capital efficient to build a business here. When you’re getting started, you can really make your dollars go further, and that’s a big deal. So for all those reasons, being in Cincinnati has been terrific.”