Key facts
- Flyhomes and Figure Technology Solutions have partnered to expand financing for Flyhomes' Buy Before You Sell loans.
- The partnership is expected to support up to $2.4 billion in annual loan volume.
- Flyhomes' short-term bridge loans will be integrated into Figure's Democratized Prime marketplace.
- Figure's marketplace offers a decentralized approach to warehouse lending, connecting originators with a wider range of capital providers.
- The collaboration will leverage Figure's Digital Asset Registry Technology (DART), a blockchain-based system for asset ownership.
Flyhomes announced a strategic partnership with Figure Technology Solutions to bolster its wholesale lending platform and support its Buy Before You Sell loan program. The collaboration is projected to facilitate up to $2.4 billion in annual loan volume as the company expands nationwide.
Under the agreement, Flyhomes' short-term bridge loans will be integrated into Figure's decentralized warehouse marketplace, Democratized Prime. This integration is designed to provide Flyhomes with an additional funding channel by connecting it with a diverse base of institutional and retail capital providers. This marks Flyhomes' third financing strategy, complementing its existing methods of selling loans to whole-loan investors and financing on its balance sheet.
Ryan Dibble, Flyhomes' CFO and co-founder, stated that the partnership offers a significant increase in total volume, removing constraints on business growth and enabling partners to better serve consumers. He also noted that the increased capacity will help build a stronger performance history for bridge loans, potentially leading to more favorable financing terms over time.
Figure's Chief Capital Officer, Todd Stevens, highlighted that Flyhomes' bridge loans are a suitable fit for Democratized Prime, addressing the common challenge of equity lock-in for homeowners. He explained that these loans enable buyers to purchase new homes before selling their existing ones, with the loans maturing after the sale of the borrower's current property. Stevens characterized these loans as high-quality credit for investors due to their short duration and self-liquidating structure.
Stevens further elaborated that Figure's marketplace distinguishes itself from traditional warehouse lending by directly connecting originators with a broad spectrum of capital providers, bypassing the lengthy negotiation processes typical of bilateral bank agreements. The marketplace utilizes a direct matching network funded by institutional and retail credit participants, with financing settling programmatically.
The partnership will also incorporate Figure's Digital Asset Registry Technology (DART), a blockchain-based system for registering e-notes and liens, intended to function as an alternative to MERS. DART aims to reduce fraud and collateral risks by creating a ledger-based record of asset ownership.
According to Dibble, the partnership, which has no specified end date, will largely operate behind the scenes and is not expected to materially alter the experience for Flyhomes' lending partners or their customers. However, the enhanced financing capacity is anticipated to provide loan officers and real estate agents with greater assurance of Flyhomes' ability to consistently fund loans.
Flyhomes estimates that 65% to 70% of homebuyers need to sell an existing residence before purchasing a new one. The company's products cater to various homeowner needs, from downsizing to accommodating growing families. Flyhomes has facilitated over $8 billion in transaction volume for more than 12,000 families and collaborates with over 300 lending partners across 43 states.
Flyhomes CEO Tushar Garg expressed that Figure's advanced capital markets platform is precisely the type of partner needed as the Buy Before You Sell offering gains national traction. Stevens indicated that for Figure, success would be measured by enabling Flyhomes to scale without traditional balance-sheet limitations and by demonstrating the efficacy of blockchain-based capital markets in supporting loan production.