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Buy a house without a mortgage or all cash?

A Pittsburgh startup company is introducing a new way to look at homeownership, and it’s creating quite a stir.

Fleq launched saying it could get Americans into a home without requiring a mortgage.

“We didn’t think that [mortgages] were the appropriate and fair approach to homeownership, and we didn’t think it resonated with Millennials and Gen Zers, who saw their parents wiped out by the financial crisis,” said founder and CEO Todd Sherer, whose background is in real estate finance.

So the company started its own homeownership model. Check out the first round of Q&A here. But even after this, many questions went unanswered. So HousingWire sat down for a second time with Sherer to learn more about his concept and vision for his company, and for homeownership across the U.S.

Here is the next round of questions and answers with Sherer:

HousingWire: Would buyers own equity in the home as they make payments on it?

Todd Sherer: The quickest way to answer your question is to say: Fleq Members can absolutely acquire more equity in their house. However, we should take a minute to talk about how that actually works. One of the hardest things about launching a product as revolutionary as Fleq is that we have to basically reset an established vocabulary.

For instance, the idea of “making payments on a property” does not exist with Fleq. That concept applies to a situation like a mortgage where a bank places a lien on your property and some portion of your monthly payment goes to interest and some amount goes to principal. Or in a contract for deed or rent to own scenario, where someone else owns the property and your monthly payment is in excess of market rent and that excess portion builds equity or preserves your option to buy the home. Fleq operates very differently. Fleq completely separates your obligations as an owner of the property and those obligations that come from living in the property.

Let’s go through a fictional scenario to provide some more clarity.


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