Divvy Homes, a Silicon Valley-backed company that promised an alternative path to homeownership for consumers of modest means, has been acquired by an operator of single-family home rentals, the company said on Wednesday.
The so-called rent-to-own company, which at one time was valued at $2 billion, was sold in a deal valued at $1 billion to Maymont Homes, a division of Brookfield Properties, according to a joint news release.
The company had told employees of an impending sale a few weeks ago, according to people briefed on the matter. Several workers were laid off ahead of an announcement.
News of a potential deal was earlier reported by Fast Company.
Divvy, which once operated more than 7,000 homes in 19 metropolitan areas in the United States, had struggled in an era of high-interest rates that made it difficult for consumers of modest means to get a mortgage. The company, founded in 2017, also was plagued by complaints from customers about failures to make home repairs in a timely fashion and the relatively high rents it charged.
Divvy’s portfolio of homes is smaller than it used to be as the company has sold-off vacant homes in recent years.
The sale comes as the housing market remains out of reach for many Americans because of a combination of high mortgage rates, high home prices and a lack of supply of new homes. The average rate on a 30-year mortgage, the most popular home loan in the United States, is around 7 percent.