November 06, 2020
Moving from Wall Street to Main Street
MSCF alumnus’ homeownership financing company generates impressive returns
After nearly a decade in financial services, Sahil Gupta could no longer ignore a recurring theme.
Consumers still continued to struggle with access to credit and cash flow, despite advancements in technology and growth of the fintech industry.
“We’re still originating 30-year mortgages in a time when consumers’ stay in their homes for less than a third of that time,” Sahil explains. “That needs to change.”
A 2007 graduate of Carnegie Mellon’s Master of Science in Computational Finance (MSCF) program, Sahil saw Wall Street emerge from the 2008 global financial crisis slightly changed, but ultimately unscathed, while the average American consumer never fully recovered. He decided to pursue his passion for developing new financial products and help the more than half of American homeowners who have hundreds of thousands of dollars in equity in their homes but still struggle with cash flow.
“It was a problem I knew was worth solving,” said Sahil. “My desire is to build products that help Main Street consumers – by aligning interests with Wall Street – and create equal partnerships where both sides thrive and succeed over the long term.”
In 2016, Gupta launched Noah (previously Patch Homes), a finance company that helps homeowners tap into their home equity without selling or refinancing their house.
The company offers homeowners access to their largest asset without taking on additional debt or monthly payments, providing them up to $350,000 in upfront funding to pay down their debt, renovate, launch a business or deal with an emergency. In return, Noah shares in a portion of the future value of the home, and homeowners have up to 10 years to buy out Noah’s investment by either selling, refinancing or using savings.
Noah makes money if the home increases in value during the 10-year term. If the home doesn’t increase in value, Noah shares in the losses with the homeowner.
The idea for Noah dates back to 1982, when Sahil’s father built their first home in India. As a young father, he didn't want to take on debt, so he asked his younger brother for help in the form of an investment in their family home. Sahil’s uncle fronted the money and, in exchange, shared in the value of the home — right up until the family sold it last year. Decades later, Sahil’s friend mentioned his own difficulties with home equity financing, due to the lack of flexibility by banks.
The idea for Noah was born. It later received funding from Union Square Ventures (USV), Nathan Blecharczyk (co-founder of Airbnb), Brian Thomas (co-founder of Clutter) and many others.
As founder, Gupta spends most of his time working with homeowners and capital partners around the world. Skills gained during his MSCF internship and Wall Street experience help Sahil maintain a focus on scalability, distribution and long-term strategy with each new product launch.
“We are working to develop a suite of financial products and services to help consumers through their homeownership journey,” Sahil said. “With each innovation, we are constantly asking how we can leverage technology and data to better price these products to benefit both consumers and investors.”
From the first transaction at Noah, Sahil knew society was ready for a change. To date, the company has served hundreds of homeowners and funded homes worth hundreds of millions of dollars in multiple cities. Sahil credits the evolution of fintech in allowing the company to onboard and service its customers efficiently and effectively.
“I think the future of fintech is extremely bright and will become a word synonymous with technology and scale,” Sahil said. “In order to achieve that vision, we need to build trust between all players of the ecosystem — consumers, investors and platforms like Noah.”