Want a more expensive property? Use a consortium.
Few people know, but the FGTS (Brazilian employee severance fund) can be used for this type of financing, which increases the purchasing power of those who want a new house or apartment.
247_The demand for real estate consortiums grew by 14,6% in the first half of this year. 124,2 new people are now pursuing the dream of homeownership. In total, there are more than 600 active consortium members awaiting the monthly draw or a bid that could change their family life. While a credit letter is a powerful instrument for real estate negotiation, the Guarantee Fund for Length of Service (FGTS) can increase the options for those seeking their first home. For those who have contributed for more than three years and have a good balance, the FGTS offers various possibilities for supplementing, paying off, or reducing the value of consortium installments, or for use as a bid in the pursuit of contracted funds.
This flexibility helps with your purchasing power. For those who receive a credit letter of R$ 100, the FGTS balance can broaden the horizon for the search for a new property. “Withdrawing and supplementing the credit letter is the most common way to use the consortium with the guarantee fund,” says Elaine Gomes, manager of the legal department of the Brazilian Association of Consortium Administrators (Abac). It is also possible to deduct the amount paid monthly to the administrator up to a limit of 80%. For those with a payment of R$ 1, the FGTS will deduct R$ 800, and the remainder will necessarily have to come out of their own pocket. “Those who partially amortize the balance need to wait two years to use the FGTS again in the consortium,” says Elaine. But the guarantee fund cannot be seen as a savior in cases of default. Those who are more than three months in arrears on the consortium cannot withdraw the funds to bring the account up to date. The only option is to liquidate the consortium.
Couples who want to use both of their FGTS (Brazilian employee severance fund) deposits for a credit letter need to be careful. Only the holder of the consortium share can receive this benefit. Therefore, pay attention to the property division regime of your marriage, which will determine what can be done. For those with universal community of property, there is no problem. But other types of prenuptial agreements may make it difficult to use. To avoid this complication, be sure of your marital status to avoid surprises when receiving the money. "To overcome this deficiency, it is possible to put both names as consortium holders," says Elaine.
The rules for using FGTS (Brazilian employee severance fund) in a consortium follow the same guidelines established by Caixa Econômica Federal for those financing a property. In a consortium, it's possible to use up to 100% of the funds, provided the maximum property value is R$ 500 – the sum of the credit letter and the FGTS balance cannot exceed this amount. Those with other types of loans from the Housing Finance System (SFH) cannot use FGTS to supplement the credit letter. Although real estate consortia allow the use of FGTS for renovations or the purchase of commercial spaces, it is exclusively for the acquisition of houses or apartments. And for those considering a second home, at the beach or in the countryside, a consortium is perfect, as long as it's not using FGTS.