Landed helps essential workers afford homeownership by offering down payment assistance in exchange for equity in the home.
Landed partners with organizations to provide its down payment solution as a benefit to employees, aiming to diversify its revenue streams.
Deep dives
Landed: Helping Essential Workers Buy Homes
Landed is a company that addresses the challenge of home affordability by helping essential workers, such as nurses and teachers, with down payments. In exchange for providing the cash for the down payment, Landed obtains an equity stake in the home. This arrangement allows essential workers who have stable incomes but lack the upfront costs to access homeownership. Landed partners with various organizations to reach its target customers, and it has helped over a thousand essential workers purchase homes across the country. The company recognizes the need to diversify its revenue streams, and it is exploring partnerships with institutions to offer its down payment solution as a benefit to employees.
The Concept behind Landed and its Revenue Model
Landed's concept aims to democratize access to homeownership by providing down payment assistance to individuals who can afford mortgage payments but lack the upfront cash. Landed invests in the future appreciation of the home and receives a share of that appreciation when the home is sold or refinanced. Their revenue model includes partnering with real estate agents who share a portion of their commission in exchange for leads, and they also work as mortgage brokers. Additionally, they are exploring a shift towards a B2B model, collaborating with organizations to offer their down payment solution as a benefit to their employees.
Helping Essential Workers Overcome Barriers to Homeownership
Landed focuses on assisting essential workers who face barriers to homeownership, such as high upfront costs and unaffordable housing in desirable areas. By partnering with school districts, hospitals, and government entities, Landed markets its down payment assistance program directly to essential workers, ensuring that they are aware of the resources available to them. The program enables essential workers to transition from being renters to homeowners, without having to rely on intergenerational wealth or face financial burdens. The ultimate goal is to provide a more accessible pathway to building wealth through homeownership.
Addressing Inequality and Shifting Paradigms
Landed challenges the traditional notion of homeownership by adopting a shared appreciation model. This approach acknowledges the speculative nature of residential real estate as a barrier to entry and explores alternative options for ownership. By providing access to ownership in a more cooperative and manageable way, Landed aims to democratize wealth-building opportunities. The company recognizes the need for systemic change and hopes to shift the paradigm from a binary zero or one option to a more inclusive and diverse approach that benefits a wider range of individuals.
Pricey down payments have put homeownership out of reach for many Americans, especially those who don’t have access to intergenerational wealth. This issue is particularly acute in cities, where the salaries of essential workers like educators, healthcare professionals, and municipal service providers haven’t kept pace with skyrocketing home values.
An introductory finance course got Alex Lofton thinking about his own experience with this issue — and creative ways to address it. In 2015, he and two co-founders launched Landed, a for-profit company that offers down payment assistance in exchange for a share in a home’s eventual appreciation.
This week on How I Built This Lab, Alex talks with Guy about his company’s work to help more Americans build wealth by purchasing homes. Alex also recounts how working for the Obama for America campaign in 2008 influenced his approach to organizational leadership, plus he and Guy discuss the potential consequences of capitalism unchecked.
This episode was produced by Sam Paulson and edited by John Isabella, with music by Ramtin Arablouei. Our audio engineer was Katherine Silva.