LendingHome Marketplace FAQ
LendingHome offers an easy way to build a high-quality, high-return portfolio backed by real estate. Want to know more? We’ve put together some resources and FAQs for you.
Questions & Answers
How do I invest on the platform?
The LendingHome investor platform makes it easy for individuals to invest in a portfolio of mortgages. Individuals who want to invest can sign up through our website to see investment opportunities immediately, and make their first investment within days. Check out our explanation of how it works
Who is eligible to invest?
Currently, our retail investor platform is only open to individuals who are accredited investors in the U.S. This means that you must meet certain minimum annual income or net worth thresholds.
Who provides the capital for the loans?
LendingHome is a direct lender. We use our own capital to originate loans, and in the days following a loan closing, we sell either whole loans to institutional investors or issue Platform Notes to individual investors. Because the loans have already been funded, you start earning interest from the very first day that you invest.
Can I pick my investments? Or are they assigned?
You can browse all investment opportunities open to individual investors, select ones that interest you, and specify the investment amount you wish to commit. Or you can have our AutoInvest feature do the work for you.
How do you screen investments and what information is available about them?
We perform a comprehensive assessment of many parts of the loan, including the borrower’s credit, the asset valuation, and additional considerations specific to the opportunity being assessed. This diligence helps us offer you high quality investments so you won’t have to worry about evaluating each detail of the loan. If you do want to learn more about the mortgages in your portfolio, you can see information about the borrower, property, and loan terms through the investor portal.
Are there minimum commitment amounts?
$50,000 is the minimum required capital to become an investor on LendingHome’s platform. Individual Platform Notes can be accessed for as little as $1,000 per loan for AutoInvest and $5,000 each for manual accounts, allowing you to spread out your investment across a variety of notes.
How long are loan durations?
Your capital will be deployed for the length of the loan term, 12 months or less. It may be shorter if there is a prepayment by the borrower. It may be potentially longer if the loan has any issues including delinquency or default towards the end of the term.
How do you service the loans?
Each mortgage loan is serviced by LendingHome. Our servicing team collects payments and administers the loans, which includes handling any loan modifications or loss mitigation options, or arranging foreclosure proceedings.
How do I get paid back?
After payments are collected and applicable servicing fees are deducted, the remaining principal and interest is sent to you as a pro-rata share of your participation in the Platform Note. Those funds are seamlessly returned to your dedicated on-platform account, where the funds can either be withdrawn or reinvested to keep earning returns.
Can I see how my investments are performing?
Yes, you have 24/7 access to your investor dashboard, which shows you the in-depth status of each investment made and the performance of the underlying mortgage. You will know when payments have been made, if payments have been missed, the status of the loan, current unpaid balance, a complete history of proceeds received, and much more. You can also view summarized statistics for your portfolio, which are also sent as monthly statements.
What happens if a loan goes into default?
We will inform you if any significant actions are taken on loans related to your investments. We handle the process to provide a turnkey investment experience and ensure you’ll never have to worry about recovering the principal and interest of the loan.
What are the tax implications of investing?
Investments in our Platform Notes will result in interest income to investors. The interest provisions of each Platform Note vary according to the specific terms of the corresponding mortgage loan. Please consult with your tax advisor to determine the tax implications of any proposed investments.
What are the expected returns?
Expected returns on LendingHome vary by loan product and may change over time as the underlying credit profiles, macroeconomic factors, and underwriting processes evolve. For each investment opportunity, we provide the gross underlying interest rate that, if the loan is paid on a normal schedule, is the rate of interest income that will be earned.
If I invest now, am I committed to any future investments?
No, there are no commitments or requirements to make additional investments.
Do you recommend specific investments?
LendingHome sources high quality loans and strives to present investors with relevant information on investment opportunities, laid out in a clear and concise manner, to provide you with the ability to make the most informed decision. However, we do not provide recommendations related to the suitability of any particular investments.
What security is acquired upon investment?
Investors will acquire a borrower payment dependent promissory note (a “Platform Note”) from LendingHome Funding Corporation, a wholly-owned subsidiary of LendingHome Corporation. The Platform Note is an unsecured, limited recourse obligation of LendingHome Funding Corporation that corresponds with an underlying mortgage loan originated on the LendingHome Platform. Payments under the Platform Note are made when, as, and if, payments are collected by LendingHome under the underlying mortgage loan, net of transaction costs.
Are the Platform Notes secured?
No, Platform Notes are not secured. While their corresponding mortgage is secured, Platform Notes themselves are not secured.
Have regulators reviewed the Platform Notes?
The Platform Notes are being offered in reliance on an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), and are not required to comply with specific disclosure requirements that apply to registration under the Securities Act. Neither the Securities and Exchange Commission, nor any state regulator, has passed upon the merits of or given its approval to the securities, the terms of the offering, or the accuracy or completeness of any offering materials.