Mortgage rates have nearly doubled since 2021, leaving more than 10 million borrowers who otherwise could have become homeowners left on the sidelines. Exacerbating the problem is the lack of supply – which is artificially boosting home prices and creating a serious affordability issue.
The that end, Foyer has introduced the first 401(k) specifically designed to help prospective homebuyers save for homeownership.
Founded by former Better.com executive Landy Liu, Foyer provides a pathway to homeownership through secure, accelerated savings programs and a platform of purchasing resources so first-time homebuyers can confidently make their dream of buying a home a reality.
“Just like planning for retirement, homeownership needs a dedicated plan with a matching contribution that enables first-time homebuyers to achieve their dream of owning a home,” Liu says in a release. “After I tried to buy my first home last year, and saw interest rates move multiple percentage points in that process, I realized that the prospect for homeownership was in crisis. So I put my own home purchase on pause and started Foyer – the 401(k) for homeownership.
“The same way other major life goals, like saving for retirement and college tuition, have dedicated accounts, Foyer is the dedicated platform for the 50 million potential first-time homebuyers sitting on the sidelines across the U.S. today,” Liu adds.
Foyer matches 1% of deposits – up to the first $20,000 each year – for the 401(k). It also offers first time homebuyer high-yield savings accounts.
Foyer helps new homebuyers stay up-to-speed on every step of the homebuying journey with education and tools that help them understand how much they can afford, the additional expenses besides a downpayment, how a mortgage works, choosing the right real estate agent, and more.
When homebuying milestones are met, Foyer connects buyers with local agents and lenders who specialize in serving first-time homebuyers. Buyers homebuying goals and progress are shared with local experts to ensure a seamless introduction to real estate experts who know exactly where they are on their homebuying journey.
The company has been piloting the platform with 100 users in Michigan over the past few months and the initial response has been positive. Foyer is rolling out the offering across the state and anticipates going live in Colorado and Oregon in the first quarter of next year.
Foyer will also be expanding its offering to corporate partners in the coming year. Employees are increasingly focussed on their inability to buy their first home. By giving employers the option to offer Foyer as a corporate benefit, employers will be able to help their employees combat the home affordability crisis while at the same time improving their own employee retention.