Flyhomes partners with Figure to fund Buy Before You Sell loans

Flyhomes announced on Tuesday that it has partnered with Figure Technology Solutions to expand financing for its wholesale lending platform and support up to $2.4 billion in annual Buy Before You Sell volume as adoption grows.

The partnership will bring Flyhomes’ short-term bridge loans to Figure’s decentralized warehouse marketplace, Democratized Prime. Eligible loans originated by Flyhomes will flow through the marketplace, connecting the company with institutional and retail capital providers and creating an additional funding channel for its nationwide expansion.

Flyhomes’ Buy Before You Sell platform helps homeowners purchase their next home before selling their existing property. Through its wholesale model, the company works with mortgage lenders, brokers and real estate agents, allowing lending partners to remain the originator of record.

The Figure partnership provides Flyhomes with a third strategy for financing its loans, said Ryan Dibble, Flyhomes’ CFO and co-founder. The company currently sells some loans to whole-loan investors and finances others on its balance sheet.

“It’s a meaningful increase in total volume for us and really means that we’re unconstrained to continue to grow our business and expand our partners’ ability to deliver the product to consumers,” Dibble said.

The additional capacity will allow Flyhomes to increase loan volume and build a longer performance history for its bridge loans, potentially helping the company secure more favorable financing over time, Dibble said.

“You need to show performance that then unlocks lower-cost capital, and then you need to do more volume and improve more performance that then unlocks better and cheaper capital,” he said.

Strong fit for Democratized Prime

Figure Chief Capital Officer Todd Stevens said Flyhomes’ bridge loans are a strong fit for Democratized Prime because they address the challenge of equity lock-in.

“Millions of homeowners have the financial wherewithal to move, but their equity is trapped in their current home until it sells,” Stevens said. “Flyhomes delivers short-term bridge financing so buyers can buy their next home without having to worry about selling their current home first.”

The loans are secured by residential property equity and are expected to mature after the sale of the borrower’s existing home. Their short duration and self-liquidating structure offer investors a high-quality credit profile, Stevens said.

Figure’s marketplace differs from traditional warehouse lending by connecting originators with a broader pool of capital providers rather than relying on bilateral agreements with banks, according to Stevens.

Traditional warehouse agreements can take weeks or months to negotiate and require significant legal and administrative work. Figure uses a direct matching network funded by institutional investors and retail credit participants, with financing settling programmatically.

“It’s not bilateral — it’s open to a decentralized pool of participants and funding settles programmatically,” Stevens said.

The partnership will also use Digital Asset Registry Technology (DART)

DART is Figure’s blockchain-based e-note and lien registry. Figure describes DART as an alternative to the Mortgage Electronic Registration Systems (MERS).

Stevens said the registry creates a ledger-based record of asset ownership intended to reduce fraud and collateral risks, including the possibility that the same collateral could be pledged to multiple lenders.

The partnership, which does not have an end date, will not materially change the experience for Flyhomes’ lending partners or their customers, Dibble said, because the new financing arrangement operates primarily behind the scenes. Rather, the additional capacity could give loan officers and real estate agents greater confidence that Flyhomes can consistently fund loans as its volume grows, he said.

Stevens said that the partnership is expandable and he expects it to grow over time.

Flyhomes’ potential customer base is broad. Dibble said an estimated 65% to 70% of homebuyers have an existing residence they need to sell, either to access equity or remove the debt before taking on a new mortgage.

The company’s products can serve homeowners looking to downsize as well as growing families seeking larger homes. Flyhomes said it has helped more than 12,000 families complete more than $8 billion in transaction volume and has worked with more than 300 lending partners. Its products are available in 43 states.

“Figure has built one of the most advanced capital markets platforms in lending, and that is exactly the kind of partner we need as Buy Before You Sell continues to gain nationwide adoption,” Tushar Garg, Flyhomes’ CEO and co-founder, said in a statement.

For Figure, Stevens said success will mean allowing Flyhomes to scale without the balance-sheet constraints associated with traditional warehouse financing while demonstrating how blockchain-based capital markets can support loan production.