ZeroDown is an affordable homeownership solution in the San Francisco Bay Area.
Home buying isn’t just expensive here—it’s cost-prohibitive. So the majority of people end
up renting, as a cheaper, but wasteful alternative.
But what if there was an option between renting and owning? That’s where ZeroDown comes in: we buy the home you want. You move in and pay us a fixed monthly amount, building towards ownership each month. Purchase-credits* vest to you monthly, just like stock options at your workplace.
ZeroDown blends the security of ownership with the flexibility of renting.
Purchase-credits represent the portion of the home value that you have accumulated over time.
Traditionally, homeowners accumulate home equity over time as they pay down their mortgage debt. With ZeroDown, residents can start building net worth up without taking on a mortgage.
Each monthly payment you make earns you purchase-credits which represent a percentage of your ZeroDown home's value.
The purchase-credits you build have a two-year cliff, which means that as long as you live in a ZeroDown home (and
make payments toward it) for at least two years, you can put it to use.
After two years, you can buy the home from us, using your purchase-credits toward a down payment, or move and cash out by selling your purchase-credits to us.
ZeroDown is best for people who are:
ZeroDown currently operates in the San Francisco Bay Area.
As a ZeroDown resident, you’re not just our customer—you’re our homeownership partner. This means that our goals and incentives are aligned: we both want your ZeroDown home to appreciate in value. In addition to world-class real estate agents, you get all the benefits of ZeroDown's real estate expertise and data science, when it comes to making a decision on which homes to consider.
We also make money from our partnership with trusted real estate broker partners via commission rebates.
You are completely protected from any volatility in home prices by locking in your cash out price. If home prices fell in value, you would still be able to cash out your earned purchase-credits at the predetermined price we agreed on at the time of your move-in, unlike with a traditional mortgage, where your loan might be under water.
ZeroDown guarantees you downside protection.
You are completely protected from any volatility in home prices by locking in the price at which you can buy your home from us. If the home prices have had runaway appreciation and is now worth a whole lot more than your predetermined price, you will still be able to buy the home from us at the predetermined price which would be at a discount to market rate.
ZeroDown gives you unlimited upside—everything over and above the locked in predetermined price is yours to keep.
ZeroDown represents a new approach to homeownership, developed with would-be homebuyers' interests in mind. Unlike banks or other lenders, we don’t require a downpayment or ask to sign a long-term contract. Instead, we strive to give you more leeway and control in the homebuying process. In that way, there’s no real comparison between traditional options and ZeroDown. If you’re going to compare anyway, it’s a good idea to weigh all the possible costs and benefits, keeping in mind the buying, living, and selling experiences.
ZeroDown offers the benefits of homeownership without the drawbacks of a mortgage.
Mortgages are loans that add to your total debt, which you pay down on a monthly basis. With
ZeroDown, you never take on any debt but instead accrue home purchase-credits on a monthly basis.
Other key differences:
ZeroDown offers the flexibility and minimal risk of renting, with a few key differences:
ZeroDown owns the title to the home. If at any point (after 2 years) you choose to purchase the home from us, we transfer the title to you.
You will be leasing the home from us with an option to purchase. Once we close the home of your choice, you enter into two agreements with us - a lease agreement and an option to purchase agreement (which gives you the first right to purchase). The agreements will clearly lay out all the necessary details including but not limited to the duration and terms of the lease, payment schedules, your rights and responsibilities as a ZeroDown resident, required disclosures, terms of your option to purchase the home from us.
Your ZeroDown home purchase-credits vest to you over five years. We use a monthly vesting schedule with a cliff of two years.
For example, if you partner with ZeroDown to purchase a million-dollar home in San Jose, your vesting schedule will look like this:
|After 12 months (*)||0.00%|
|After 24 months||3.60%|
|After 36 months||5.40%|
|After 48 months||7.20%|
|After 60 months||9.00%|
ZeroDown purchase-credits have a two-year cliff, meaning that you have to live in your home for at least two years before the purchase-credits are yours.
If you leave before two years, you won’t vest into the purchase-credits in your home.
After two years, you can move out at any time and
- Buy the home from us, using your earned purchase-credits toward a down payment.
- Cash out your accumulated purchase-credits.
Yes, though you’re not under any obligation to do so.
After you've lived in a ZeroDown home for two years, you’ve vested into your purchase-credits and can purchase your home. In addition, you receive a buyout bonus (upto 5% additional purchase-credits) if you choose to buy your home. You can then get a conventional mortgage and buy the home from us at the predetermined price we agreed on at the time of your move-in.
At the time of signing the option agreement (before move-in), we specify the predetermined purchase price at which you can buy the home from us any time between 24 and 60 months. This price is determined based on average home appreciation in that neighborhood and comparable homes over the last 10 years.
For example, if the acquisition cost of a home in San Jose is $1,000,000. The predetermined purchase price will be as follows:
|When?||Purchase Price||Buyout Bonus (purchase-credits)|
|Between 24 and 36 months||$1,170,905||3%|
|Between 36 and 48 months||$1,234,134||4%|
|Between 48 and 60 months||$1,300,778||5%|
We have used ~5.4% year-over-year appreciation in this example. The historic 10 year year-over-year appreciation for San Jose is 6.5% and the historic 5 year year-over-year for San Jose is 11.5%. The numbers in this example are for illustrative purposes only. The actual numbers will depend on your home and neighborhood.
Yes, you can receive a cash payment for your accumulated purchase-credits if you decide to leave after two years. We’ll then buy back your earned purchase-credits at the predetermined home value agreed upon at the time of move-in.
You can live in a ZeroDown home for up to five years. At the end of the five-year mark, you decide whether you want to purchase the home from us or cash out your purchase-credits.
Want to stick around longer? We’re working with our partners to provide extended and longer-term options for ZeroDown residents.
Want to check out sooner? Simply give us 90 days’ notice, and you’re free to go.
Absolutely. You can make any improvements or modifications to your home as you see fit. The quality of the home and any improvement to the home contributes positively to the home value.
No, your ZeroDown home must be your primary residence, and you cannot sublet or sublease a portion or your entire home. However, you can do "hosted" short-term rentals like Airbnb in your home as long as you still occupy the house.
To apply, first sign up, we’ll invite you to qualify and link your bank account(s), which allows us to confirm your income and get a picture of your finances. We then work with you to determine what monthly payments you can afford, keeping in mind a number of factors including but not limited to your annual household income, debt obligations, financial history, and employment status. Getting a sense of your finances ultimately enables us to establish your home value budget. For example, if you can afford a $6,700 monthly payment, then the maximum cost of the home you choose is approximately $1,000,000.
Qualifying for ZeroDown requires a soft credit check, which won’t ding your score.
Absolutely not. We didn’t choose the name “ZeroDown” for nothing!
When you get qualified, we ask you for a few pieces of basic information and to link us to your bank and credit card account(s), which gives us an understanding of your finances. If we happen to need any other information, we'll reach out to you.
Once you complete your qualification application, we will be in touch with you within 48 hours.
No. However, there is a one-time flat program fee of $10,000, when we make an offer on the home of your choice.
You will be asked to pay a one-time flat program fee of $10,000 for ZeroDown, when we make an offer to buy the home of your choice. Once our offer is accepted, we take care of all the other closing related costs of buying your home. That's it! No other costs, no hidden fees.
Here's an example listed for illustrative purposes — If we are buying a home for $1,000,000 - your one-time program fee would be $10,000. In comparison, if you were to buy a home through mortgage your total closing costs would be between $20,000 - $30,0001, in addition to a down payment.
1 These are based of median closing costs for a buyer in the Bay Area.
Your monthly costs will depend on the value of the home you select and will not change as long as you live in your home. This is the only payment you’ll ever make to ZeroDown and we’ll take care of property taxes and home insurance. No hidden costs, no hidden fees, ever!
For a $1,000,000 single family home without HOA fees in the San Francisco Bay Area -- using Bay Area median values to calculate property taxes and insurance, the monthly payment will be $6,700.
No. Your monthly payment to ZeroDown is inclusive of property taxes and insurance.
Yes. That said, we'll deduct it from your account along with your monthly payment and take care of making regular payments to the homeowners association on your behalf.
As the resident and homeownership partner of the property, you are responsible for its maintenance. The same goes for any re-design or improvements that you want to make to the property. For large repairs, like roof replacements and HVAC breakdowns, ZeroDown will cover it.
No, your monthly payments are not tax deductible.