What's different about HomeFundMe?
Until now, your employees had to pretty much shoulder the burden of the down payment on their own. Gift funds were only possible from close family and church, and only with significant paperwork and financial statements. Now, with HomeFundMe, for the first time ever, your employees can source funds from three major new categories:
How much can it help my employees?
We’ve seen many prospective homebuyers go from having just a few thousand dollars in the bank to having enough money for a down payment in weeks, versus years and years. It can easily cut the down payment burden in half. Through social media and direct communication, they leverage friends, family, weddings, holidays, birthdays, co-worker contributions, teammate contributions, and many other opportunities. Who wouldn’t rather help a young couple buy their first home that given them a toaster oven for their wedding? It’s people helping people they believe in.
On top of that, they have a double-match from CMG, and often, a Realtor grant. These can be worth thousands of dollars.
How much can it help employee retention?
Roughly half of America’s workforce is in the 18-35 age group, and the average age of a first time homebuyer is about 33. That means that your younger employees – – the future of your company — are heavily weighted towards being highly-mobile renters. That could be why 4 out of 5 new hires don’t stay with their companies more than 5 years. They’re often highly receptive to a better deal, and can move companies easily.
Turning renters into homeowners can have a positive impact on your company’s ability to retain its best and brightest employees.
How does the crowdfunding work?
Prospective home buyers get prequalified, share their story, and raise funds all through one platform. Here’s how it works…
First, they go to the customized Affinity Portal that we deploy for your company. That connects them with a CMG loan officer to set up an account and get prequalified. Once we run the numbers, we can determine what their minimum down payment requirement is and what loan is best suited for them.
Next, they set up their customized crowdfunding page, and tell their story with pictures, video, and written content. They can share their unique campaign link with family and friends on social media, through email, or any other way they like. It’s called the multiplier effect. The more people share their campaign, the more networks they will reach.
Friends and co-workers can donate to the campaign in any amount, with just a few clicks, and none of the paperwork hassle that normally accompanies gift funds. All funds are Fannie Mae and Freddie Mac compliant.
Once they reach their down payment goal, they will be ready to buy their new home. If they surpass the minimum goal, they can even keep going! All funds raised can go toward their new home.
Who helps my employees do this?
Your employees are supported 100% of the way, with a HomeFundMe team that works with them from Day 1 until their new home is purchased.
The Loan Officers that work for CMG Financial are the team leaders. They are some of the most experienced lending professionals in the industry. They will help your employee get the process rolling and stay with them every step of the way.
Since most employees have never run a crowdfunding campaign (don’t worry, that’s totally normal), we help them through the process with a dedicated Fundraising Coach. These team members are highly experienced in helping your employee craft a fundraising story that fits their situation, and that works effectively, and in helping them communicate it effectively to their network. They’ve run hundreds of campaigns and know what to do to ensure success.
We also require that employees meet with a Housing Counseling Agency or take an approved Housing Counseling course online. This is an extremely helpful, proven process that most people don’t know about that helps create stronger buyers and smarter borrowers. Your employees will become more successful, sharper homeowners!
Finally the Realtor is the other key teammate that helps your employee find the home of their dreams, at the right price, in the right location – one that they’ll be happy with for years to come.
Can we contribute to our employees' campaigns?
Yes, and you should strongly consider this option. It helps your employees build a down payment even faster, and go from being highly-mobile renters to stable homeowners faster, which can help retention. It’s easy to do. The HomeFundMe Affinity Portal that you configure allows you to set a lump sum or match (2:1, 1:1, etc.) and contribution caps. Payments into your employees campaigns can be made via credit card or ACH. Consult your payroll and tax advisors for guidance on tax-related matters.
What costs are associated with this benefit?
HomeFundMe is available at no cost to participating companies. The platform can be used by any number of employees, and they pay no fees or commissions to crowdfund on the platform (unlike traditional crowdfunding platforms).
That said, your company should strongly consider contributing to your employees crowdfunding campaigns, which can help them go from being renters to homeowners even faster. This is optional, and of course would be a cost – it’s up to you!
How easy is it to deploy?
HomeFundMe for Employee Benefits Plans deploys effortlessly. We publish a customizable portal for your company – a place for your employees to start their campaigns, and for you to report on them. It takes just minutes to set up on your end. Then use the included communications materials to let your employees know about their new benefit.
Which employees does it apply to?
HomeFundMe is designed to help first-time homebuyers go from being a renter to being a homeowner faster than ever before, thanks to crowdfunding and grants.
However, it also can be applied to repeat homebuyers looking to accelerate the process of raising a down payment, if they are below the Area Median Income.
If your employee is a Veteran, we can help them too. First, they may be better off taking advantage of the very generous VA loan program, and HomeFundMe’s down payment crowdfunding program will not apply. These employees should still start the process within HomeFundMe which will connect them to their CMG Loan Officer teammate. CMG Financial offers a very substantial benefit (discount) to your employees who are Veterans.
Expensive homes (Jumbo lending):
If your employee is a repeat homebuyer that would normally use a Jumbo loan, we can still help, even though HomeFundMe’s down payment crowdfunding program will not apply. These employees should still start the process within HomeFundMe which will connect them to their CMG Loan Officer teammate. CMG Financial offers a very substantial benefit (discount) to your employees.
What if my employee already owns a home?
If your employee already owns a home, HomeFundMe can still be used to help accelerate the downpayment on a repeat purchase (if they earn below the Area Median Income for your area). Also, at your company’s option, your HomeFundMe platform can be made available to the older children or relatives of your employees, to help them get a faster start on becoming homeowners. And your company always has the option to contribute to those campaigns too! You decide who gets to use the platform. For many employees who already own a home, seeing their children get a head start is a real benefit too!
What about payroll reporting?
The HomeFundMe Affinity Portal comes with reporting tools that you can use in the event that you are donating to your employees’ campaigns. As they are a contribution, you should consult your tax advisor for proper payroll and tax treatment.
What about tax consequences of a company match?
Consult your tax advisor for guidance if you elect to contribute to your employees’ campaigns. Normally, additional fringe benefits would be treated as such from a tax standpoint, including being reported on payroll forms and tax forms. Some companies will “gross up” this number so that the net amount is consistent across employees, etc.
Couldn't we just make a direct gift/payment to employees?
The advantage of HomeFundMe is that it allows 3rd parties to contribute to the down payment on the employee’s home.
Outside of HomeFundMe, a gift is of course possible, but could be used for other things by the employee (which would defeat the purpose) and also if used in the down payment, would have to be subject to seasoning requirements or significant paperwork requirements (again, defeating the purpose).
Who is behind HomeFundMe?
HomeFundMe was launched in 2017 by California-based CMG Financial, one of the nation’s largest privately-held mortgage banks. Founded in 1993, CMG funds approximately $12 billion in mortgages annually through 80 retail branches coast-to-coast, plus wholesale and correspondent channels.
CMG has long been known in the industry as an innovator, having launched the All In One loan, the first patented mortgage-checking product in the industry.
CMG’s President and founder, Chris George, currently serves as Vice-Chairman of the Mortgage Bankers Association, and is its incoming 2018-2019 Chairman.