Many employers offer a number of benefits as a way to entice new employees to join the company and to keep their current employees satisfied, including health insurance, paid time off, and contributions to the employees’ 401(k) account.
While employees may not see the benefits of their 401(k) until they retire, employers can now offer their employees a new benefit that they’ll be able to use much sooner – help with a down payment on a house.
The new benefit program comes courtesy of HomeFundMe, the only Fannie Mae and Freddie Mac-approved down payment crowdfunding platform.
Using HomeFundMe, borrowers can crowdfund their down payment from various sources.
The HomeFundMe program was created by CMG Financial, a privately held mortgage banking firm. Borrowers who use HomeFundMe are required to use CMG Financial as their lender, but the program does offer several benefits, including lender contributions under certain circumstances.
Now, with the Affinity Portal program from HomeFundMe, employers will be able to contribute directly to their employees’ HomeFundMe accounts to help them raise money for a down payment.
Here’s how it works, courtesy of HomeFundMe:
The HomeFundMe Affinity Portal allows employers to add HomeFundMe to their benefit packages, with the option to elect to match donations in any amount. Employers simply have to share the customized crowdfunding platform with employees and HomeFundMe will provide all the materials necessary to communicate the benefit.
According to HomeFundMe, some loans are eligible for a lender contribution of $2 for every $1 crowdfunded, up to the lesser of $2,500 or 1% of the purchase price if the buyer falls under the average median income.
Homebuyers whose income is above the average median income can receive a lender contribution of $2 for every $1 crowdfunded, up to the lesser of $1,000 or 1% of the purchase price.
Additionally, some HomeFundMe loans are eligible for a buyer or listing agent contribution of 1% towards the down payment.
According to HomeFundMe, benefits of using the platform include: prequalification, fundraising coaching, homebuyer education and loan origination.
The company said that unlike “generic crowdfunding platforms,” HomeFundMe users are not charged any taxes, fees or fundraising commissions.
All users also receive a dedicated support team of lender, Realtor, housing agency coach and fundraising coaches., and all the crowdfunded money is held in escrow until closing.
“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. The Affinity Portal helps to bridge that gap by giving employers the ability to give their employees the benefits that matter most to them,” Chris George, president of CMG Financial, said.
“A typical campaign can cut an employee’s down payment burden in half in many cases,” George said. “We look forward to working with employers to create their customized crowdfunding portals and give their employees a path to homeownership.”