Keith Rabois Champions Roam’s $11.5M Series A as ‘The Future of the Housing Market’

During the COVID-19 pandemic, mortgage interest rates hit historic lows, dropping as low as 2.5%. However, the landscape has changed dramatically, with rates soaring to nearly 8% in 2023. As of April 1, the national average for a 30-year fixed mortgage APR stands at 6.84%. This significant fluctuation has left many potential homebuyers feeling excluded from the market. Fortunately, assumable mortgages present a new opportunity for buyers to take advantage of lower interest rates from previous years.

What is an Assumable Mortgage?

An assumable mortgage allows a buyer to take over a seller’s existing loan, potentially benefiting from the seller’s lower interest rate. This financial strategy can be particularly advantageous in today’s high-rate environment.

Roam: Revolutionizing the Housing Market

Enter Roam, a New York-based startup aiming to provide access to thousands of homes with assumable mortgages across the United States. Founded in September 2023 by CEO Raunaq Singh, Roam has already facilitated $200 million in home sales for several hundred buyers in 2024. More than 200,000 buyers have registered on Roam’s platform in the past year, showcasing a growing interest in this innovative approach to home buying.

How Roam Works

Roam charges buyers a fee of 1% of the purchase price, translating to approximately $2 million in revenue for 2024 based on their recent sales figures. Singh emphasizes that assumable loans can save buyers up to 50% on monthly payments compared to current mortgage rates. For instance, in a scenario where a home is priced at $420,000 and the seller has a 2.25% interest rate, buyers can potentially secure a blended rate as low as 3.45%.

Benefits of Using Roam

• Lower Monthly Payments: Buyers can significantly reduce their monthly housing costs.
• Quick Approval Process: Roam allows buyers to get pre-approved before making an offer, increasing the acceptance rate of their proposals.
• Less Liability for Sellers: Sellers are released from liability for the loan once the assumption is completed.

Expansion Plans and Future Prospects

Currently operational in 17 states, including Arizona, California, Florida, Texas, and North Carolina, Roam has plans to expand nationwide by the end of the year. Singh anticipates that the company will facilitate $1 billion in home sales by 2025, a goal supported by investors like Keith Rabois from Khosla Ventures, who believes Roam is at the forefront of addressing the affordable housing crisis in America.

Investor Confidence and Financial Backing

Roam recently secured $11.5 million in Series A funding, demonstrating strong investor confidence. Rabois, who has a background in the proptech industry, sees Roam as a transformative player in the housing market. The startup has raised a total of approximately $16 million across three funding rounds, including a pre-seed round and a seed round led by notable investors.

Streamlining the Home Buying Process

Traditionally, finding assumable mortgages was a challenge for buyers. Singh notes that many sellers and listing agents are unaware of the existence of assumable loans, which can lead to missed opportunities. With Roam, buyers can now access over 2,000 assumable mortgages in cities like Houston, significantly improving their chances of finding a suitable home.

Closing the Deal Efficiently

Roam has optimized the closing process for assumable mortgages, reducing the typical timeframe from 180 days to just 45 days. If Roam fails to close within this period, they will cover the seller’s mortgage until the deal is finalized, ensuring peace of mind for both buyers and sellers.

The Market Potential

With an estimated $1.4 trillion in fully assumable FHA/VA mortgages originated in 2020 and 2021, Singh believes there is a significant opportunity for growth in this sector. As many as one in three homes financed during those low-rate years may qualify for an assumable loan.

For more information on how assumable mortgages can benefit you, explore our mortgage options or consult with a financial advisor. By leveraging the innovative solutions offered by companies like Roam, potential homeowners can navigate today’s challenging market more effectively.