Jul 15, 2022 - Business

Home Lending Pal is trying to demystify mortgages

Bryan Young, CEO of Home Lending Pal, stands for a portrait.

Bryan Young, CEO of Home Lending Pal. Photo: Courtesy of Bryan Young.

Home Lending Pal, a Black-led startup from Durham, believes its software could be an important tool in boosting minority homeownership.

What it does: Home Lending Pal is the creator of an advising platform that seeks to eliminate the confusion of applying for a mortgage.

  • Individuals can use the platform to identify properties and then research and apply for mortgage loans.
  • Importantly, when Home Lending Pal connects someone to a lender, it hides identifiers like race or sex.

Why it matters: Black and other minority applicants are denied mortgages at significantly higher rates than their white counterparts, exacerbating the wealth gap between the groups, according to Zillow research.

  • Many minority applicants that likely would be approved have become too discouraged to apply or aren't being reached by traditional banks, co-founder Bryan Young told Axios.
  • Home Lending Pal wants to create a judgment-free zone for these applicants to research what they need to become.

After going through an IBM accelerator program, Home Lending Pal went on to collaborate with the tech giant, which gave it an assist in building out its data security and artificial intelligence capabilities.

  • The partnership also helped the startup build relationships with large financial institutions, Young said.
An IBM entrance sign.
Photo: Silas Stein/picture alliance via Getty Images

For IBM, the partnership with Home Lending Pal gives it a chance to see how its technology can be used by small startups compared to a large company, said Kate Woolley, general manager of IBM Ecosystem.

  • Working with a startup "is absolutely a benefit for IBM," Woolley said, "as we think about evolving our portfolio and being attractive for both the very large [institutions] and also the smaller companies that do want to scale."

Results: Young said that Home Lending Pal has around 20,000 users signed up, 12% of whom it has helped get pre-approved for a mortgage — a rate that Young says exceeds industry averages.

  • Of those pre-approved, 800 went on to become homeowners, and 33% of them were Black.

What's next: Young believes Home Lending Pal is poised to reach more customers in the next year.

  • In addition to large financial institutions and credit unions, Home Lending Pal also wants to work with Fannie Mae and Freddie Mac — two federally backed home mortgage companies — as they roll out equitable housing finance plans meant to lower barriers to Black homeownership.

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