Landy Liu knows how hard it is to save for a home.
While working at mortgage startup Better.com, he spent years dealing with first-home home buyers who felt overwhelmed when it came to shopping for homes. By the time it was his turn in 2022, mortgage rates had nearly doubled, and he found himself in one of the most challenging homebuying environments in decades.
“I put my purchase on hold and used my down payment to start Foyer, where I am a user alongside our members,” he told TechCrunch.
Foyer is a platform that helps consumers save for down payments, essentially acting as a “401k for homeownership,” Liu said. He noted that specialized saving accounts and apps exist these days for nearly every big milestone, “retirement, college tuition, even major health expenses,” he said. Yet while there are general options in the market for saving up for down payments, there is nothing akin to a platform focused on down payments for homes.
“We believe homeownership is a vital part of the American dream and first-time homebuyers need all the help they can get,” he added.
On Foyer, users can create target savings goals and access personalized guidance on the best ways to save for a home, information about mortgage rates, and choosing a real estate firm. The company has a subscription model, offering memberships to users looking for more support. It can connect users with real estate professionals and also allows customers to earn rewards that can be used towards a home purchase.
“Real estate service providers spend billions annually marketing to end users and now they are able to more directly support the financial wellness of aspiring homebuyers,” Liu said.
Buying a home has become quite challenging in the past few years, with many aspiring homebuyers finding themselves priced out of the market completely, far away from hitting the milestones that generations previously hit at young ages. “Saving for one’s home requires better planning than ever,” he said.
Investors clearly see some shine in the idea. Today, Foyer is announcing a $6.2 million seed round led by Alpaca VC and Hometeam Ventures. Accion Venture Lab and Clocktower Ventures also participated in the round.
“Homeownership plays a crucial role in building long-term financial security, particularly for underserved communities that have historically been shut out of wealth-building opportunities,” Amee Parhboo, a managing partner at Accion Venture Lab, told TechCrunch.
David Goldberg, general partner at Alpaca VC, said what drew the firm to Foyer was its “reimagined approach to homeownership.”
“The combination of high-yield savings, education, and strategic partnerships makes this a compelling bet on the future of homebuying,” he told TechCrunch.
Liu said he met the lead investors through mutual connections in the fintech and proptech space. For now, Liu said Foyer’s main competition is traditional savings accounts. Foyer launched last year in Michigan but has since spread throughout the country, attracting more than 10,000 users, it said.
The fresh capital will help the company expand and enhance product features.
“Home affordability is in crisis and yet homeownership remains the greatest source of wealth creation for middle-class and minority families in the United States,” Liu said. “Foyer is providing a solution for first-time homebuyers, a dedicated savings account that works for the next generation of homeowners.”
