Proptech company Rook Capital on Wednesday announced a partnership with Keller Williams Northern Colorado and First Bank, to leverage its shared equity program to expand home ownership and tackle challenges in home affordability.
The program aims to partner homebuyers with community-based investors to purchase a home with shared equity. The proptech firm identifies locations and properties with the “best prospects for return” using its technology, it said in a press release this week.
Rook offers a partnership with an investment of up to $200,000, based on home value, creditworthiness, and exiting equity.
Homebuyers don’t make monthly payments to Rook or accrue annual interest; Rook and its partners take an equity share of the home with a second lien, which is due 10 years after the first mortgage with First Bank is originated. Rook Capital pays 25% of the purchase price and covers closing costs.
In September, Rook Capital announced having secured $4.1 million in a capital fundraise and access to a warehouse credit facility. The company said it intends to use the funds raised to develop its program, dubbed “Shared Value Investment,” to help homebuyers purchase homes.
Rook Capital says its solution will ensure faster home ownership and community building, a sharing of risks and rewards based on equity contribution and home financing for home buyers to buy a house with a lower payment.
Ed Messman, CEO of Rook Capital, said in a statement the hike in house prices since the last decade and high interest rates, pose difficulties for first time homebuyers to build a community and generate wealth. The product and partnership will help “get families in homes,” Messman said.
“We have many prospective customers who just need a little help to be able to buy a house. Rook’s solution helps us expand the footprint of people we are able to help,” David Rusaw, a real estate agent at Keller Williams Northern Colorado, said in a statement.
Editor’s note: This story was updated to clarify the terms of the maximum investment amount.
