The Children of OFWs Formed This Proptech Startup to Make Housing Loans Easier For Filipinos
ILLUSTRATOR KARL BELTRAN
Financial inclusion seems to be the buzzword of the decade. In the last few years, Filipinos have quickly adapted to mobile wallets, online banking, online investing, and more. We might be a few years behind other parts of the world, but the pandemic has hastened digitalization in the financial sector.
With that progress came the phrase “financial inclusion,” which many seem to equate to only having an online bank account. But in the realm of financial literacy, financial inclusion covers all facets of being financially sound. One area that’s relatively neglected is housing loans.
Buying a home might be the most important decision a person will make, but accessibility to education and information on the matter is severely lacking. The average Filipino fresh out of college about to start his or her professional career doesn’t know the process of purchasing a home and getting a loan—all without being scammed. All too often we hear stories of a friend paying for a house they can’t afford, or of a relative whose house is being foreclosed because he couldn’t keep up with payments. It all boils down to being properly informed before signing a contract.
And this is where the Y Combinator-backed Filipino startup Uwi Homes comes in. A proptech startup that was only formed in early 2021, Uwi Homes began when the children of OFWs and Filipino-Americans identified the pain point in home financing. Founders Joseph Tan, Henry Yeh, Rex Rodriguez, and Rubi Concepcion came together to form a digital mortgage broker that’s democratizing access to housing loans in the Philippines. Serving aspiring homeowners, lenders, and developers alike, Uwi Homes is positioning itself as a game-changer in the Philippine home loan industry—and in how Filipinos perceive housing loans.
The Uwi Ecosystem
Everyone knows someone with a horror story about trying to purchase a home. In the case of the founders of Uwi Homes, chief revenue officer Henry Yeh experienced it firsthand when he tried applying for a housing loan in the Philippines. Despite having a high-income salary in Singapore and being qualified for property loans in the U.S., Yeh was surprised when he found out he wasn’t qualified to get a housing loan in the Philippines. In what he called a “messy experience,” Yeh noticed that for aspiring homeowners who aren’t in the know, getting a dream home can become a troublesome experience.
It’s a sentiment shared by his cofounders, who all aim to simplify the process through Uwi Homes, giving Filipinos the education and services they need to get their dream home.
Coming from the U.S., the founders realized that there’s more that can be done in the housing loan industry in the Philippines. In the U.S., you can get pre-approved for a housing loan within just weeks if you fit the criteria. According to Joseph Tan, CEO of Uwi Homes, the U.S. boasts the most efficient system in the world.
“We want to bring that experience over here, which is really organized, really structured—just a seamless experience,” explained Tan.
Through its tech-enabled platform, Uwi Homes does the majority of the leg work for aspiring homeowners. You only need to fill out the website’s form that will gather property, work, income/debt, and loan information. Once that’s settled, Uwi Homes will calculate whether you qualify for pre-approval, and once you do, it will connect you to the lenders in its portfolio and get you underwritten within minutes.
As a mortgage broker, Uwi Homes doesn’t offer loans, but it will connect you to the people who do. Instead of having to apply at each and every bank separately, the platform lets you do all you need to do in one online space, bypassing repetitive paperwork and excessive bureaucratic systems. It seems like a no-brainer concept, but the Philippines’ absence of a centralized credit scoring system has made getting housing loans a tedious process in the Philippines.
“[In the U.S.], they already have this credit scoring system, [while] we’re still building on that. When you apply for a loan, you'll get asked for all these documents. These are voluminous. There's a lot of it that you need to submit to the bank [in the Philippines] compared to the U.S. because they already have an idea of your credit,” explained Ruby Concepcion, the startups' chief financial officer.
To give customers a seamless experience, Uwi Homes has created its own ecosystem with buyers, banks, and developers. Partnering directly with lenders and developers, Uwi Homes gathers data on their respective minimum borrower criteria, and the technology provided by chief technology officer Rex Rodriguez automates the borrower experience.
According to Concepcion, Uwi Homes takes this information and works backward. Banks tend to only accept customers that fit in its “box”—a list of criteria that separates those who can afford a loan and those who can’t. “Being able to understand how it works with the box, how they filter it at the start, makes it really valuable to the end user,” explained Concepcion.
By communicating with lenders, developers, and customers, Uwi Homes filters through the applicants and lowers the rate of rejection to save everyone’s time and money.
“What [rejection] does is it ruins the process for the buyer, the seller, and the broker. Because what we ask everyone to do is follow more of the Western standard, which is to get pre-qualified so the buyer knows what they can afford. And then most importantly, the seller knows what the buyer can afford,” Tan elaborated.
Uwi Homes’ platform is just the start. The startup founders know that to make a significant impact on the local housing loan industry, it all boils down to financial literacy. Utang gets a negative rap in the Philippines, something the founders aim to change with its upcoming learning center. The educational platform attached to the startup’s housing loan service will give customers the material they need to know what a loan actually is, how to calculate what you can afford, and how a loan can impact your life.
The learning center will simplify and define the complicated terminology of the housing loan industry, which more often than not only confuses customers. With material in English, Taglish, and Tagalog that uses layman’s terms, the team hopes its audience will leave their learning center with more knowledge than when they entered it.
“The general vibe now is they don't understand it,” shared Concepcion on the average Filipino’s attitude toward housing loans. The minimal understanding of property deeds and real estate taxes “speaks volumes in terms of the understanding of Filipinos of how do you actually buy a house.”
The consequences of buying a house without understanding what it entails can be ruinous for homeowners. Tan and Concepcion recounted a story of homeowners who would opt for pre-selling properties and get accepted for loans, only to discover that their salaries were not enough to cover the expenses of the housing loan. The result? Customers would default.
“One of the most important things to understand is that if a buyer defaults on a loan, that person has been removed from being a future buyer for the rest of their life,” explained Tan. The financial equivalent of a scarlet letter, defaulting could detrimentally affect the lives of uneducated homeowners.
Its concerns like this that make Uwi Homes’ learning center and mission for financial inclusion a boon for the housing loan industry.
“When I was younger and didn’t know any better, I had to read the fine print,” shared Rodriguez, who was born and raised in the Philippines. “I'm glad that I did read the fine print or I would have had that thing on my credit score as a young man.”
Bespoke Loan Programs
Aside from educating borrowers, Uwi Homes works with its ecosystem by providing bespoke loan programs that directly advocate for financial inclusion. The issue with the housing loan industry’s concept of the “box” is that it can be strict and limiting, excluding many from the opportunity to secure a loan and a home. Through the tech created by CTO Rex Rodriguez, Uwi Homes basically says to its lenders: “Not everyone can fit the box, but maybe the box can be more flexible,” explained Yeh.
“We're trying to say, 'Look, use this as a benchmark against your existing financial scoring model, use this as a second set of eyes. What Rex is building is an opportunity to say, ‘Hey, somebody missed the payment. But guess what, if you look at their entire history, they only missed one payment. So, that's called an outlier,’” explained Tan.
Rodriguez admits that for now, banks might accept their data at face value, but this could soon change as the startup grows bigger.
“Hopefully, our score becomes more mature with more data points, and it becomes more reliable so it makes it easier for financial institutions to make use of this,” said Rodriguez.
There’s plenty in store for Uwi Homes. After getting the backing of Y Combinator—the same startup accelerator that helped launch some of the world's most successful companies like Reddit, Stripe, Twitch, and AirBnb—Uwi Homes plans to expand its bespoke loan programs and partner with more lenders and developers. Regional expansion is also part of the vision once they establish a proof of concept here in the Philippines.
“We’re probably the only truly tech company that is focused on the mortgage space specifically trying to help optimize the lending experience, from lending to the borrower, the borrower to the lender,” said Tan. “We really want to stress financial literacy, and we are providing a tremendous amount of content written specifically for Filipinos to understand what it takes to buy a home and, more importantly, if you can even afford it.”
Buying a house is no easy task, but with this startup at your back, borrowers might just get the support they need to make one of the most important decisions in their lives.