Calque Reimagines Home Buying with Innovative Financing Solution

Written by:

Rudi Davis

Date:

16 Dec 2024

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Fintech company Calque is transforming how Americans handle one of their most challenging financial transactions: buying a new home while selling their current one. Founded in 2020, the company—whose name derives from the Latin word for “loan translation”—provides white-label buy-before-you-sell solutions through established lenders.

“Anyone who bought pre-pandemic probably has at least 40% equity in their home right now. But that equity’s trapped,” explains Chandra Srivastava, who heads up Sales and Marketing at the company. Traditional paths force sellers to either spend thousands on temporary housing or make contingent offers that studies show require paying about 11% above market price to win deals.

The company’s solution is straightforward yet innovative: they place a binding backup contract on the seller’s existing home with a 150-day window to sell. This enables their lending partners to write non-contingent financing on the new home purchase as if the old property has already sold. Homeowners can tap their existing equity for down payments while avoiding the stress and expense of temporary housing.

Unlike competitors who build consumer-facing brands, Calque’s white-label strategy empowers established lenders to offer the solution under their own names. “As the market’s gotten a little tighter, we offer a pretty great competitive edge against another bank or mortgage company for our lending partners,” Srivastava notes. Despite launching during the pandemic, the company has experienced faster-than-expected growth from 2023 into 2024.

The solution has proven particularly valuable for specific segments. One homebuyer won their desired property on their first attempt using Calque’s program after losing eight consecutive bids with contingent financing. The program has also aided immunocompromised individuals who couldn’t host traditional showings during the pandemic, and families seeking to avoid the disruption of multiple moves.

Consumer awareness is something the business is focused on, particularly outside major metropolitan areas. “I bet those numbers would be in the single digits in terms of borrower awareness” outside major markets like Phoenix, Houston, and Austin, Srivastava estimates. However, with mortgage rates trending downward and post-election stability on the horizon, market conditions suggest growing demand for innovative financing options.

Calque’s commitment to seller protection distinguishes its offering. “We’re not trying to buy low and flip their house,” Srivastava emphasizes. If they must purchase a home that doesn’t sell within the window, they handle necessary improvements and return any profit above their costs to the original owner. This approach demonstrates their focus on facilitating transitions rather than property speculation.

With new products in development and an expanding network of lending partners, Calque appears positioned to reshape how Americans navigate real estate transactions. Their solution addresses a critical market need while prioritizing both lender relationships and homeowner protection, potentially establishing a new standard for real estate transactions in an evolving market.