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Acre Homes, a company that describes itself as a consumer-led solution for homeownership, has raised a total of $10 million with the completion of an Anthemis-led seed round, as reported in a December announcement.
The specific amount of this latest funding round was not disclosed. Inman has requested further details from Acre regarding the funding amount.
Several funds participated in the 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 based on alternative finance, offering equity-building through short-term mortgages of three to five years on homes purchased for clients. It provides low down payments, typically around five percent, paid to Acre.
Buyers have the option to purchase the home from Acre at the end of their initial term, apply their “value share” to the amount, transfer the share to another Acre home, or take it with them if they choose to leave.
The announcement stated that Acre customers on average “saved $9,000 in purchase costs and are 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 offers consumers various product iterations based on different equity percentages, terms, and time frames. Interested agents are encouraged to visit the company’s FAQ section for more information.
“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,” as stated on its website. “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.”
According to the National Association of Realtors, 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 a shorter period, typically three to five years.
Acre co-founder and CEO Mike Schneider expressed excitement over securing the latest investment, stating, “We founded this company because buying a home no longer makes sense for a growing number of Americans. 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 from the recent seed round will support the company’s general growth, according to Acre.