Individuals looking to overcome the down payment barrier to purchasing a home may be eligible for assistance through their employer, thanks to a new program launched by mortgage lender CMG Financial…
Individuals looking to overcome the down payment barrier to purchasing a home may be eligible for assistance through their employer, thanks to a new program.
HomeFundMe, the down payment assistance crowdfunding platform introduced by national mortgage banking firm CMG Financial in October, officially announced the launch of the Affinity Portal Wednesday, which makes it easy for companies to add HomeFundMe to their employees’ benefits package. The platform is the first and only down payment crowdfunding site approved by Freddie Mac and Fannie Mae.
By adding HomeFundMe to their benefits package, companies give employees access to the entire platform, which includes a real estate agent, housing agency coach and fundraising coaches to help potential homebuyers set and reach their down payment goal, in addition to loan origination services from CMG Financial. The platform also offers homebuying education, and unlike GoFundMe and Kickstarter — which both collect a 5 percent fee — HomeFundMe promises no taxes, fees or fundraising commissions.
According to Paul Akinmade, HomeFundMe’s chief marketing officer, the real estate agents the company chooses to work with on the Affinity Portal will be based on relationships developed by CMG Financial retail team, which identifies and invites agents to work as part of the support team.
“CMG Financial loan officers will be referring pre-qualified borrower to agents in their markets that can effectively service customers,” Akinmade said. “We are already seeing an influx of customers that need Realtor assistance and plan to see that grow exponentially.”
After prequalifying for a mortgage through the site, individuals using the platform then create a profile using photos and videos to showcase their dream home and introduce themselves to prospective donors. The platform makes it easy for prospective buyers to share their story across a multitude of social media platforms and solicit donations.
HomeFundMe matches $2 for every $1 raised up to the lesser of $1,000 or 1 percent — if the buyer falls under the area median income, the match cap climbs to $2,500. Some HomeFundMe loans are also eligible for 1% contribution matches from buyer’s agents or listing agents.
The launch of the Affinity Portal adds a new advantage to the system — the prospect of an employer contribution if the company so choses.
After the funds are raised — and users keep any money raised over the goal, which could lead to lower monthly loan payments — they’re placed in an escrow holding account with the user’s bank until the home is purchased.
According to Zillow, nearly 70 percent of renters believe the down payment is the biggest obstacle to homeownership, and it’s no surprise with the nation’s student debt total climbing — it totaled over 1.3 trillion in 2017. According to a study conducted at Yale University, the average debt for 2016 college graduates was $37,000.
So by adding the benefit — especially with employer contribution — companies might be able to attract more talent and retain a more stable employee base.
According to Chris George, the president of CMG Financial, a typical campaign can cut an employee’s down payment burden in half in many cases.
“More than ever, employers are looking for ways to retain and attract the best and brightest talent and millennials are looking for the lifestyle perks that will help them achieve their goals,” said George in a statement. “The Affinity Portal helps to bridge that gap by giving employers the ability to give their employees the benefits that matter most to them.”
HomeFundMe found that most younger employees enter the workforce as nomadic renters — with 78 percent leaving their first job within five years. There are 75.4 million workers in the 18-35 age bracket, according to HomeFundMe, and they comprise the largest demographic in the American workforce.
So if the ping-pong table in the break room or French-fry Fridays weren’t attracting top young talent, maybe the promise of homeownership will.