Landed Keeps Cities Affordable To Teachers
Almost four years ago, Jonathan Asmis, Alex Lofton and Jesse Vaughan started with a crazy idea to solve a very serious, not-so-crazy problem.
Teaching and K-12 education once represented a solidly middle-class profession in American metros throughout the country. However, over the past generation, salaries and budgets have not kept up with the cost of living, and in particular, housing. Only 0.7% and 2% of for-sale homes are affordable to teachers in San Francisco and San Jose respectively, according to Trulia. Across the country, affordability for teachers declined in 85 of the country’s 93 largest metros, according to the same study. This had led to profound educator retention issues for districts across the United States.
The company the trio founded — Landed — helps K-12 school, college and university educators put together their initial down payments by investing alongside them. Instead of providing a loan with interest, Landed offers educators half of a standard down payment in exchange for part of the appreciation when the home is sold. So far, the company has helped hundreds of people into homes worth more than $100 million in the metro areas of Denver, San Francisco, Seattle, San Diego, and Los Angeles.
The momentum they’ve achieved over the last few years convinced us at Initialized to lead the company’s $7.5 million Series A round. With this new capital, Landed will expand to more than a dozen markets by the end of 2019, including Austin, Boston, and Honolulu. Not only is the company helping districts retain talent, Landed is building a promising and trusted brand and financial institution. They are well-positioned to help not just educators, but all other essential professionals like them who are needed to run cities, achieve their lifetime goals with a range of financial services.
Fannie Mae, one of the two government-sponsored mortgage financing giants that helps most Americans access home ownership in the country, has helped Landed ensure that the company’s down payment support meets guidelines under the Community Seconds program. That enables Landed to provide educators with loan products and financing terms that are competitive with the broader market.
Teachers have stable, reliable incomes yet struggle to make the initial typical 20 percent downpayment that is common in many of these markets. The rising cost of housing, plus other obligations like student loans, is making it more challenging for early career professionals to meet this financial hurdle. In fact, more than a quarter of all mortgage borrowers who used FHA-insured loans in the last year have turned to a relative to make the down payment. Yet not everyone has access to this “Bank of Mom and Dad,” nor is that access to that kind of family capital equitable. That’s where Landed comes in.
We’ve followed them since their very first transaction, and Initialized is excited to help them in the next part of their journey.