Fintech startup Home Lending Pal is using artificial intelligence to make homeownership a reality for more millennials and minorities.
Home Lending Pal, co-founded by Bryan Young and Steven Better, is a mortgage research platform that uses AI to simulate underwriting. The process helps prospective homebuyers determine loan affordability and compare the likelihood of approvals with multiple lenders.
The pair began in Florida in 2017 but decided to expand operations to Charlotte and the Raleigh/Durham area after participating in the locally based RevTech Labs' IBM Hyper Protect Accelerator in 2019.
"Our initial thought was, 'A home is one of the biggest purchases you'll ever make. There's so much data out here about home buying, and everyone benefits from that except the buyer,'" Young said.
The platform, called Intelligent Mortgage Advisor, works by having clients connect their bank accounts to give the Home Lending Pal teams access to their last two years of transactions and authorize a soft credit pull. This helps identify any issues or red flags that might prevent a potential homebuyer from being approved for a loan, he said. The platform also helps clients search for affordable mortgage options, find hidden homeownership costs and identify lenders willing to work with them.
"The whole process takes about 15 minutes and is very interactive by pushing you to start adding homes you're actually interested in and running calculations to tell you what the entirety of your homeownership might look like," Young said. "Then we decide if you're ready to move forward."
Young said Home Lending Pal works directly with financial institutions and will soon launch a partnership with Michigan-based Flagstar Bank. These partnerships, he said, will help give clients insight into the entire process to ensure they're not being taken advantage of as consumers.
"The goal is to leverage AI and blockchain that allow the lender to see financial data but hides person information like race and gender," he said. "By leveraging that technology, we can better address the ability for millennials and minorities to become homeowners."
"These are people who are qualified to buy but may have thin credit profiles, and Home Lending Pal opens up the homeownership market as an opportunity for more than nine million people," Young added.
Since its launch, Home Lending Pal has raised about $1.3 million in funding that included a seed round late last year and an NC IDEA Seed Grant.
"We have been in a public beta phase since last year and have a little more than 10,000 users," Young said. "We encourage people to use the system because the more they interact, the more feedback we get to show larger banking institutions that this is something they should want."
Another, more personal goal is to eventually become a Certified B Corporation, Young said.
"I'm Black, and Steven is Latino, and we want to give back to STEM projects geared toward minorities in the space," he said. "We want to partner with nonprofits geared toward financial literacy, and we're hoping we can leverage that to donate back to these great causes."
