Flyhomes Partners With Figure For $2.4B Buy Before You Sell Loans

Flyhomes announced on Tuesday, October 24, 2023, that it has entered into a partnership with Figure Technology Solutions to enhance financing for its wholesale lending platform. This collaboration is projected to support an annual volume of up to $2.4 billion in Buy Before You Sell loans, reflecting growing adoption of the company's services. The partnership will integrate Flyhomes' short-term bridge loans into Figure's decentralized warehouse marketplace, known as Democratized Prime. This integration will enable eligible loans originated by Flyhomes to be channeled through the marketplace, thereby connecting the company with a broader base of institutional and retail capital providers. This creates an additional and significant funding avenue to support Flyhomes' ongoing nationwide expansion efforts.

Flyhomes' Buy Before You Sell platform is designed to assist homeowners in purchasing their next residence before they have sold their current property. Operating under a wholesale model, Flyhomes collaborates with mortgage lenders, brokers, and real estate agents, ensuring that lending partners retain their status as the originator of record for the loans. According to Ryan Dibble, Flyhomes' CFO and co-founder, the partnership with Figure represents the company's third distinct strategy for financing its loan portfolio. Previously, Flyhomes has financed its loans by selling some to whole-loan investors and by utilizing its own balance sheet for others. Dibble stated that this new arrangement signifies a substantial increase in total potential volume, effectively removing constraints on the company's ability to grow its business and expand its partners' capacity to deliver the Buy Before You Sell product to consumers.

The increased financial capacity provided by the Figure partnership will empower Flyhomes to scale its loan volume. Furthermore, it will allow the company to accumulate a more extensive performance history for its bridge loans. This enhanced track record is anticipated to be instrumental in securing more favorable financing terms in the future. Dibble elaborated on this point, explaining that demonstrating strong performance is a prerequisite for unlocking lower-cost capital. He further noted that the cycle of increasing volume and improving performance is key to accessing progressively better and cheaper capital over time. This strategic move aims to create a virtuous cycle of growth and financial efficiency for Flyhomes.

Todd Stevens, Chief Capital Officer at Figure, expressed that Flyhomes' bridge loans are an exceptionally strong fit for the Democratized Prime marketplace. He highlighted that these loans directly address the persistent challenge of equity lock-in, a significant barrier for many homeowners. Stevens indicated that millions of homeowners possess the financial means to relocate but are constrained by the equity tied up in their existing properties. The integration of Flyhomes' offerings into Democratized Prime is expected to unlock liquidity for these homeowners, facilitating their ability to move and upgrade their residences. This synergy between Flyhomes' product and Figure's marketplace infrastructure is poised to drive mutual benefits and expand market access for both entities.