Home Lending Pal, a black-led startup in Durham, believes its software could be an important tool in boosting minority homeownership.
What he does: Home Lending Pal is the creator of an advice platform that seeks to take the confusion out of applying for a mortgage.
- Individuals can use the platform to identify properties, then search and apply for mortgages.
- It’s important to note that when Home Lending Pal connects someone to a lender, it obscures identifiers such as race or gender.
Why is this important: Black and other minority candidates are denied mortgages at significantly higher rates than their white counterparts, exacerbating the wealth gap between the groups, according to Zillow research.
- Many minority applicants who would likely be approved have become too discouraged to apply or are not being contacted by traditional banks, co-founder Bryan Young told Axios.
- Home Lending Pal wants to create a judgment-free zone for these candidates to seek out what they need to become.
After crossing an IBM accelerator program, Home Lending Pal then worked with the tech giant, helping it develop its data security and artificial intelligence capabilities.
- The partnership also helped the startup build relationships with major financial institutions, Young said.
For IBMthe partnership with Home Lending Pal gives it a chance to see how its technology can be used by small startups versus a large enterprise, said Kate Woolley, general manager of IBM Ecosystem.
- Working with a startup “is absolutely an advantage for IBM,” said Woolley, “as we think about scaling our portfolio and being attractive to both the very large [institutions] and also small businesses that want to evolve. »
Results: Young said Home Lending Pal has about 20,000 registered users, 12% of whom helped get pre-approved for a mortgage — a rate that Young says exceeds industry averages.
- Of those who were pre-approved, 800 became homeowners, and 33% of them were black.
And after: Young believes Home Lending Pal is poised to reach more customers over the next year.
- In addition to major financial institutions and credit unions, Home Lending Pal also wants to work with Fannie Mae and Freddie Mac – two federally backed mortgage lenders – as they roll out. fair housing finance plans intended to reduce barriers to black home ownership.