Why We Invested: Foyer Savings

Foyer?guides first-time homebuyers toward their first home purchase through education and goal-based savings while earning interest, rewards, and discounts on mortgage and closing costs.

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The?Challenge

Homeownership is a personal goal for millions of Americans and their families, with survey results indicating that 12% of Americans - or slightly more than 30 million individuals - plan on purchasing a new home in the next year. Given one-third of homes are purchased by first-time buyers, this suggests that there are currently 10 million Americans eager to move into their first home. However, the number of homes that are actually sold in any given year is about half of that amount, and finding an affordable new home has become increasingly difficult in recent years as homeowners with low existing mortgage rates are choosing to stay in their homes to avoid purchasing in a higher interest rate environment. Due to high prices and constrained supply, Americans now need to earn over $75,000 per year to afford a standard starter home (nearly double the pre-pandemic level), putting homeownership all but out of reach for many low- and moderate-income households. ? Americans are paying attention to these changes, and a majority of renters now believe they will never be able to afford homeownership. For many, the short-term calculus suggests that renting is in their best interest - in fact, it is currently more affordable to rent than buy a starter home in every major metro area in the country. However, this short-term economic reality masks a longer-term truth: that for reasons ranging from price appreciation to structural tax advantages, homeownership is a proven savings and wealth-building tool that generates greater long-term financial returns than alternative investments including stocks and bonds and provides much needed financial security in retirement. Owned homes are the most valuable single asset across all U.S. households, and for a typical American homeowner the equity they hold in their home accounts for 45% of their total net worth (this figure jumps up to 63% and 66% for Black and Hispanic homeowners, respectively). These long-term economic benefits highlight the importance of promoting access to homeownership for all Americans, including alleviating the informational and financial roadblocks that lead many to believe that owning a home is an unattainable dream.

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The Foyer Advantage

We invested in Foyer because we believe that their guided approach to the homebuying process will meaningfully expand access to home ownership for low- and moderate-income first-time homebuyers. Survey data from prospective homeowners shows that insufficient savings for a down payment is the primary reason that prospective buyers feel they cannot buy a home. However, there is also a clear gap in homeowner education, as 70% of this group believes that buying a home requires a 20% down payment, far higher than what is required by many first-time buyer programs. Foyer seeks to alleviate these problems by guiding first-time homebuyers through the homebuying process, from initial planning and education to goal-based savings that rewards prospective buyers for becoming financially prepared to buy their first home. The company offers a high-yield savings account that offers interest, proprietary rewards, discounts on mortgage and closing costs, and tax savings (in certain states). New users establish a savings goal using Foyer’s down payment calculator, which factors in home prices, mortgage rates, and expected closing costs to bring transparency to the true upfront cost of buying a new home. As they save, Foyer provides proprietary educational materials and live advisory support to help guide users along every step of the way in achieving their home ownership goals. Upon reaching their savings goal, users can elect to be paired with members of Foyer’s nationwide network of real estate agents and mortgage lending professionals to find, finance, and complete the purchase of a new home.?

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Foyer is led by Landy Liu, a founder who previously served as a General Manager at Better.com, leading the company’s efforts to expand into new business lines. This experience helped highlight a common problem in the real estate industry, where a lack of overall preparedness prevents prospective first-time buyers from becoming homeowners while simultaneously creating a challenging environment for real estate agents and mortgage lenders seeking to identify qualified leads. Foyer is now working alongside those agents and lenders - from large, nationwide groups to small independent players - to help ensure first-time buyers have access to the financial tools and information they need to prepare for homeownership and are engaging with service providers when they are ready to transact. Foyer is also helping identify prospective buyers by partnering with employers to offer Foyer’s services to their employees, particularly in industries where proximity to job sites are important such as healthcare, education, and manufacturing. Due to these partnerships, over 70% of Foyer’s current members work in professions that disproportionately employ low- and moderate-income Americans?such as nursing, manufacturing, food service, personal care, teaching, construction, and gig work.???

Impact and Thesis Fit

ResilienceVC invests in embedded fintech models that drive resilience for all Americans. We believe that fintech embedded in other core services can drive real financial resilience while driving better margins and scale for companies. Foyer is helping drive financial resilience for low- and moderate-income Americans by facilitating access to homeownership, the largest single source of wealth for many Americans. Foyer brings transparency and personalized guidance to a complex homebuying process through an intuitive mobile application and proprietary educational content, and helps accelerate the process to purchase qualification through earned interest, negotiated discounts and found rewards. These rewards add up to real money - a prospective buyer saving up for a typical starter home can accumulate thousands of dollars in savings, a substantial increase in overall buying power. For Foyer’s core user base - where nearly 80% earn less than $100K per year - this savings boost can be the difference between another year of renting and moving into their first home. Foyer’s positive impact will only continue to grow as they expand their member network to the millions of Americans currently seeking to buy their first home. We are excited to partner with Foyer and support their work bringing housing stability, long-term wealth-building, and overall financial resilience to a new generation of homeowners.?

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About ResilienceVC ResilienceVC is a seed-stage venture fund investing in embedded fintech startups that are driving financial resilience for low- and moderate-income consumers and small businesses. The firm invests in startups that are leveraging new technologies and business models to provide affordable, relevant, and responsible financial services that increase income, lower risk, and build net worth to help Americans thrive. Founded by Tahira Dosani and Vikas Raj, the ResilienceVC team has over a decade of joint experience in seed-stage fintech investing and has supported over 75 innovative and impactful fintech startups. The team's extensive experience in the fintech sector and in early stage VC drives best-in-class sourcing, diligence, and portfolio support, delivering long-term impact and top-tier returns. More on ResilienceVC can be found here: https://www.resilience.vc/