YardHomes
YardHomes is a startup social business helping to address the affordable housing crisis. The company specializes in installing and financing Accessory Dwelling Units (ADUs), which are small secondary dwellings located on the same lot as a single-family home or duplex.
In addition to selling ADUs at market-rate direct to consumers of all types, YardHomes is launching its Y-HELP program in affordable housing. In this model, YardHomes places an ADU on an existing residential property owned by a partner, typically a nonprofit affordable housing agency or mission-aligned individual or business. For 10 years, YardHomes owns and manages the ADU, offering it as a new affordable rental unit for low-income tenants supported by government housing subsidies. Each month, YardHomes typically shares a portion of the ADU rental income with the partner. After 10-years, YardHomes transfers ownership in the ADU entirely to the partner.
Venn’s PRI will help YardHomes accelerate its Y-HELP program primarily by capitalizing 25% of each ADU’s cost upfront, so that it can get traditional bank financing to cover the remaining 75%. Given that the estimated price of each ADU fully installed is around $100,000, then for each ~$25,000 allocated to Venn’s PRI, one more unit of affordable housing can be provided.*
*subject to changing market conditions.
What is an ADU?
ADU = “Accessory Dwelling Unit”
Small secondary structure on the same lot as an existing single-family home or duplex.
ADUs can be attached, detached, or above-garage.
Most ADUs are between 300-800 square feet and are a fully functioning home.
Recipient Name: YardHomes
Corporate Form: MN Specific Benefit Corporation
Entrepreneurs: Nichol Beckstrand & Jamie Stolpestad
Investment Sought: $100,000 - $1,000,000
Amount Raised to Date: $379,578
Overview of Investment Terms:
Unsecured loan, 11-year loan
Year 1: 1.5% simple interest, annual interest-only payment
Years 2-11: 3% simple interest, annual payment of accrued interest plus 1/10 of the original principal
YardHomes will need to meet certain conditions of closing
Y-HELP Program Partners
CLCLT is a Minneapolis-based nonprofit helping low-income individuals achieve home ownership and working to keep homes in the city affordable for future owners. YardHomes plans to place ADUs on properties owned by CLCT, which in 10-years hopes to transition ownership to the resident to help them build assets.
Since 1990, Minnesota Assistance Council for Veterans has been working to end veteran homelessness in MN by providing housing, employment, and legal services. MAC-V will help YardHomes identify residents that qualify for government housing subsidy.