ZeroDown is creating a new pathway to homeownership in the San Francisco Bay Area. Homebuying 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. You earn
purchase-credits represent a percentage of the home value and you earn
them over time.
disclaimers every month, much like stock options at your workplace.
ZeroDown blends the security of ownership with the flexibility of renting.
Purchase-Credits represent a percentage of the home value. You earn them 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.
Every month you earn purchase-credits that represent a percentage of your ZeroDown home's value.
The purchase-credits you build over time have a two-year cliff, which means that as long as you
live in a ZeroDown home (and are current on all payments) 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 redeeming your purchase-credits.
ZeroDown is best for people who are:
ZeroDown currently operates in the San Francisco Bay Area.
ZeroDown makes money via splitting buy side commissions with our partner agents as well as the one time flat program fee that we charge our customers.
You are completely protected from any volatility in home prices by locking in the price at which you can cash out your purchase-credits. If home prices fell in value, you would still be able to cash out your earned purchase-credits at the original purchase price, unlike with a traditional mortgage, where your loan might be under water.
For example, if you bought a $1,000,000 home with ZeroDown. After 5 years, let's say that this home is worth $800,000. You'd still be able to cash out and redeem your purchase-credits at $1,000,000 and get $75,000 (7.5% purchase-credits earned over 5 years).
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 you locked in price, you will still be able to buy the home from us at the predetermined purchase price which would be at a discount to market rate.
For example, if you bought a $1,000,000 home with ZeroDown, your pre-determined price at the end of year 5 is $1,313,166. After 5 years, let's say that this home is worth $1,600,000. You'd still be able to buy this home at $1,313,166 and apply your purchase-credits towards the purchase.
ZeroDown gives you unlimited upside. Everything over and above the locked in price is yours to keep.
ZeroDown represents a new approach to homeownership, developed with would-be homebuyers' interests. We strive to give you more leeway and control in the home buying 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 mortgage debt but instead earn home purchase-credits on a monthly basis.
Other key differences:
ZeroDown offers the flexibility and minimal risk of renting, with a few key differences:
Working with ZeroDown looks like this:
Sign-Up and Qualification - You fill out an online application, linking us to your bank account(s). That gets us started with a picture of your finances, and we work with you to determine a monthly payment you can afford and the maximum value of the home you can buy.
Choosing Your Home - After qualifying, you’ll be introduced to our partner agent, who’ll help you find and tour properties for sale in your preferred neighborhoods. At this point, if you’ve already identified a property you like, feel free to let us know.
Purchasing Your Home and Move-In - Once you’ve pinpointed the home you like, we’ll go through the bidding process together. When our offer is accepted, ZeroDown will close the home on your behalf. You’ll enter into an agreement with us that clearly lays out all the necessary details including but not limited to move-in date, monthly payment, and your rights and responsibilities as a ZeroDown resident.
We use your annual household income, assets, and your credit/debt obligations to determine the upper limit on your monthly housing expense. This limit, in turn dictates the maximum value of the ZeroDown home that we can qualify you for.
If the likelihood of finding a Bay Area home (single family, condo, townhouse)—whose value is below the limit you qualify for and in a neighborhood you prefer—is low, then we will communicate our decision to not go forward with your application.
Some of the factors that make for a strong application in the Bay Area are annual household income greater than $200,000, liquid assets, fewer debt obligations, low credit utilization, and very good or excellent credit score.
You can choose a single-family home, townhouse, or condo within your qualified price range with ZeroDown. Condos and some townhouses, however, come with some home ownership association (HOA) provisions and we’ll go through those with you, should the need arise.
ZeroDown takes care of the closing costs associated with the property purchase.
Once you sign up, you’ll go through a qualification process with ZeroDown to determine the most suitable price range based on your finances. Typically, ZeroDown works with home prices between $550,000 and $1,750,000.
We prefer that you work with one of our partner agents, whom we’ve selected for their deep knowledge of the Bay Area housing market. That said, we’re happy to partner with your agent if you’ve already been working with one and trust them.
Your ZeroDown home purchase-credits build up over five years. We use a monthly schedule with a cliff of two years. For example, if you partner with ZeroDown to purchase a million-dollar home in San Jose, your purchase-credits schedule will look like this:
|After 1 year(*)||0.00%|
|After 2 years||3.00%|
|After 3 years||4.50%|
|After 4 years||6.00%|
|After 5 years||7.50%|
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, the terms of your option to purchase the home from us.
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.
After two years, you can move out at any time and cash out your earned 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 earned your purchase-credits and can buy your home.
Bonus: If you choose to buy your home, you receive bonus purchase-credits (2x additional purchase-credits) to help with your purchase. 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 2 and 5 years. 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||Total (purchase-credits w/ bonus)|
|Between 25 and 36 months||$1,177,584||2x purchase-credits|
|Between 37 and 48 months||$1,243,538||2x purchase-credits|
|Between 49 and 60 months||$1,313,166||2x purchase-credits|
We have used ~5.6% 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 earned purchase-credits if you decide to leave after two years. We’ll then buy back your earned purchase-credits at the original purchase price of the home.
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 redeem your purchase-credits for cash.
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. We believe that 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 and qualify by linking 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 $6,899 monthly payment, then the maximum cost of the home you are eligible for is approximately $1,000,000.
Qualifying for ZeroDown requires only 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, when we make an offer on the home of your choice.
You will be asked to pay a one-time flat program fee to 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, ever!
Here's an example listed for illustrative purposes — If we are buying a home for $1,000,000 - your total closing costs would be between $20,000 - $30,000 (based off bay area median value) via a traditional mortgage. Here's the breakdown of what the costs and program fee would be with ZeroDown:
|Program Fee||Monthly Costs|
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 bay area -- using bay area median values to calculate property taxes and insurance, the monthly payment will be as follows:
|Program Fee||Monthly Costs|
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.