Rocket Companies, the parent company of Detroit-based Rocket Mortgage, has completed its $1.75 billion acquisition of real estate brokerage company Redfin, the companies announced in a press release Tuesday.
The transaction combines one of the largest mortgage lenders in the U.S. with Redfin’s popular digital platform, which offers residential real estate listings and mortgage origination services.
“I’ve used Redfin every day for the last 20 years. It helped me find and fall in love with my first home, completely changing how I thought about real estate,” Rocket Companies CEO Varun Krishna said in the press release. “The Redfin team is best-in-class in building a product experience focused on simplicity. It was a perfect fit for Rocket’s vision of what the homeownership experience should be.”
Redfin CEO Glen Kelman, who will report to Krishna and continue to head the new division of Rocket, offered a broader take on current homebuying conditions.
“The gulf between the American Dream of homeownership and reality has never been wider,” Kelman stated. “The reason Rocket and Redfin came together was to bridge that gap, so that the people who spend their days dreaming on Redfin.com can easily use Rocket financing to own their dream.”
Redfin, which positioned the deal in a separate press release as creating a “one-stop shop for homeownership,” also announced Tuesday that it is rebranding with the registered trademark “Redfin Powered by Rocket.” Additionally, the companies rolled out a preferred pricing program that lets homebuyers who use a Redfin real estate agent and finance through Rocket Mortgage choose between a 1% lower interest rate for the first year of the loan or up to $6,000 in lender credits.
When the Redfin acquisition was first announced in March, Rocket said it anticipates the combined company will realize more than $200 million in savings by 2027 by consolidating duplicate operations and other overhead.
Later in March, Rocket announced a separate deal to acquire loan service provider Mr. Cooper Group in an all-stock transaction valued at $9.4 billion. That deal is expected to close in the fourth quarter of this year.
In May, Fitch Ratings affirmed Rocket Mortgage’s long-term issuer default rating of BBB- after previously putting the company on downgrade watch. Fitch had cited concerns about Rocket taking on increased corporate debt to fund purchases of mortgage servicing rights, but the credit rating agency confirmed Rocket Mortgage’s debt as investment grade after reviewing the parent company’s first-quarter earnings results.
