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Acre Homes, a company that calls itself a consumer-led solution for homeownership, has totaled its fundraising to date to $10 million with the close of an Anthemis-led seed round, Inman learned in a December announcement.
The specific amount of the latest funding round was not disclosed. Inman has reached out to Acre for comment regarding the amount.
A number of funds participated in the new seed round, including Sovereign’s Capital, Home Technology Ventures, Studio VC, Front Porch Ventures, Unpopular Ventures, Duke Capital Partners, and former CEO of Invitation Homes Fred Tuomi.
Acre’s model is rooted in alternative finance. It provides equity-building through short-term mortgages of three to five years on homes it buys for its clients. It offers low down payments, typically around five percent, paid to Acre.
Buyers can choose to buy the home from Acre at the end of their initial term, applying their “value share” to the amount, transfer that share to another Acre home or leave and take it with them.
The announcement said that Acre customers on average “saved $9,000 in purchase costs, and is projected to benefit from an additional $50,000 through ongoing savings and home appreciation.” The latter figure is based on an estimated average annual appreciation of four percent over three years.
The company’s model offers consumers a range of product iterations based on shifting equity percentages, terms and time frames. Interested agents are advised to spend time on the company’s FAQ section.
“Acre’s base product is 10 percent cheaper than a mortgage per month and guarantees a 10 percent share of the total appreciation of the home while you live there,” its website states. “You will also have the option to benefit from Acre’s premium offering where you forgo the 10 percent monthly savings for 50 percent of the total appreciation of the home while you live there.”
The National Association of Realtors states that the average length of time a person stays in their home is a little over 12 years. Acre targets buyers who intend to stay for less time, usually three to five years.
Acre co-founder and CEO Mike Schneider said in a statement that the team is thrilled to have secured its latest investment, “particularly given the challenges of the current fundraising environment.”
“We founded this company because buying a home no longer makes sense for a growing number of Americans,” Schneider said. “Compared to a mortgage, Acre delivers an exceptional homebuying experience and compelling financial outcomes. This round enables us to expand our reach and impact for even more prospective home buyers.”
The funds in its latest seed round will be directed toward general growth, the company said. It recently launched its second market in Atlanta after launching in Raleigh and Durham, North Carolina, in 2021.