In today’s economy, having a solid credit history is crucial for accessing essential financial products and services. However, many individuals, particularly those from underserved communities, struggle to build and maintain their credit scores. Esusu, a fintech startup, has emerged as a game-changer in this space by offering a rent reporting program that helps renters build credit through on-time rent payments. In addition, Esusu has recently partnered with Fannie Mae, a leading source of residential mortgage credit, to further promote equitable access to credit for more consumers. This blog post will provide a comprehensive review of Esusu, its rent reporting program, and its partnership with Fannie Mae.
Table of contents
- What is Esusu?
- Esusu’s Rent Reporting Program
- Benefits for Renters
- Benefits for Property Owners and Managers
- Esusu and Fannie Mae Partnership
- Esusu Rent Relief Program
- How the Rent Relief Program Works
- Esusu Investors and Fundraising
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What is Esusu?
Esusu is a financial technology company founded by Abbey Wemimo and Samir Goel in 2018. The company’s mission is to empower individuals, particularly those from low-income and minority backgrounds, to achieve financial stability and build wealth. Esusu focuses on credit building, rental payment data financial wellness, and savings solutions, offering products such as rent reporting, savings clubs, and financial coaching.
Esusu’s flagship offering is its rent reporting program, which allows tenants to leverage their timely rent payments to improve their credit scores. Traditionally, rent payments have not been included in credit reports, putting many renters at a disadvantage when trying to build their credit history. Esusu’s platform aims to change this by making it easy for property owners and managers to report rent payments to major credit bureaus.
Esusu’s Rent Reporting Program
How it works
Esusu’s rent reporting program is designed to be simple and accessible for both renters and property owners/managers. Here’s how the rent reporter process works:
- Property owners or managers sign up for Esusu’s rent reporting service and connect their property management software to the platform.
- Renters opt-in to have their rent payments reported to the credit bureaus through Esusu.
- As renters make their monthly rent payments, Esusu collects the payment data from the property management software.
- Esusu then reports the rent payment information to the major credit bureaus – Experian, TransUnion, and Equifax.
Benefits for Renters
The primary benefit of Esusu’s rent reporting program for renters is the potential to improve their credit scores. By having their on-time rent payments reported to the credit bureaus, renters can establish a positive, credit report and history, which can lead to higher credit scores. This, in turn, can make it easier for them to access loans, credit cards, and other financial products at more favorable terms.
Other benefits for renters include:
- No extra cost: Renters can participate in the program without incurring additional fees, as the cost is typically covered by the property owner or manager.
- Retroactive reporting: Esusu can report up to 24 months of past rent payments to help renters build their credit history faster.
- Financial coaching: Esusu offers financial coaching services to help renters improve their overall financial wellness and achieve their goals.
Benefits for Property Owners and Managers
Property owners and property managers will also stand to benefit from Esusu’s rent reporting program:
- Increased on-time rent payments: When renters know that their payments are being reported to credit bureaus, they are more likely to prioritize timely rent payments, resulting in fewer late or missed payments for property owners.
- Attract and retain responsible tenants: By offering rent reporting, property owners can attract and retain tenants who are committed to maintaining good credit, leading to a more stable and responsible tenant base.
- Support financial inclusion: By participating in Esusu’s rent reporting program, property owners contribute to financial inclusion efforts and help underserved communities access essential financial services.
Esusu and Fannie Mae Partnership
Multifamily Positive Rent Payment Reporting Pilot Program
In 2022, Esusu announced a partnership with Fannie Mae to launch the Multifamily Positive Rent Payment Reporting Pilot Program. This groundbreaking initiative aims to assess the impact of positive rent payment reporting on credit scores and access to affordable housing in the multifamily housing sector.
The pilot program includes approximately 30,000 rental units across the United States and will run for two years. During this period, Fannie Mae and Esusu will collect data on rental history, rent payment patterns, credit score changes, and other relevant metrics to evaluate the effectiveness of rent reporting in the multifamily housing market.
How the Pilot Program Works
The Multifamily Positive Rent Payment Reporting Pilot Program follows a similar process to Esusu’s standard rent reporting program:
- Property owners or managers of Fannie Mae-financed multifamily properties sign up for the pilot program and connect their property management software to Esusu’s platform.
- Renters living in participating properties opt-in to have their rent payments reported to the credit bureaus.
- Esusu collects rent payment data from the property management software and reports it to the major credit bureaus.
Impact on Renters and the Industry
The pilot program has the potential to transform the multifamily housing industry by demonstrating the viability and benefits of rent reporting on a larger scale. If successful, the initiative could pave the way for more widespread adoption of the rent reporting services in the multifamily housing sector and beyond, leading to more equitable access to credit and affordable housing for millions of Americans.
Esusu Rent Relief Program
The Esusu Rent Relief program is designed to provide financial assistance to renters who are struggling to make their rent payments due to job loss, medical emergencies, or other unexpected events. The loan program aims to prevent evictions and promote housing stability for vulnerable tenants.
How the Rent Relief Program Works
- Renters facing financial hardship can apply for the Esusu Rent Relief program through the company’s website or mobile app.
- Applicants are required to provide documentation of their financial need, such as proof of job loss, medical bills, or other relevant information.
- Esusu reviews the application and, if approved, provides a one-time grant to cover a portion of the renter’s rent payment.
- The grant is paid directly to the property owner or manager on behalf of the renter.
Benefits of the Rent Relief Program
- Prevent evictions: By providing financial assistance to renters in need, the Esusu Rent Relief program can help prevent evictions and ensure housing stability for vulnerable individuals and families.
- Promote financial recovery: By covering a portion of the rent payment, the program allows renters to focus on getting back on their feet financially without the added stress of facing eviction.
- Strengthen communities: The Rent Relief program helps create more stable and supportive communities by ensuring that residents have access to safe and affordable housing during times of crisis.
Esusu Investors and Fundraising
Esusu has raised funds from various investors in multiple rounds. Most recently, the company raised an undisclosed amount of venture funding from Motley Fool Ventures on January 1, 2023. Before that, Esusu raised $130 million in a Series B round led by SoftBank Investment Advisers on January 7, 2022, with a pre-money valuation of $870 million. Other investors in the round included Equity Alliance, Type One Ventures, and 12 others. The funds will be used to triple the company’s employees, accelerate growth through product innovation, and build a comprehensive financial health platform.
Some notable investors in Esusu include:
- Charles and Lynn Schusterman Family Philanthropies
- Kwanza Jones & José E. Feliciano Supercharged Initiative
- Lauder Zinterhofer Family Office
- SB Opportunity Fund
- SoftBank Investment Advisers
- The Related Companies
- Wilshire Lane Capital
- Equity Alliance
- Motley Fool Ventures
- Predictive Venture Partners
- Serena Ventures
- Type One Ventures
- Financial Solutions Lab
- Concrete Rose Capital
- Impact America Fund
- Next Play Ventures
- Zeal Capital Partners
- Founder Institute
- The Global Good Fund
Esusu has also been part of business accelerator/incubator programs such as Financial Solutions Lab, Founder Institute, and The Global Good Fund.
Conclusion
Esusu is a pioneering fintech company that aims to bridge the credit gap for underserved communities by offering innovative credit-building and financial wellness solutions. Its rent reporting program has the potential to help millions of renters build their credit history and access essential financial services. The partnership with Fannie Mae is a significant milestone in Esusu’s journey, as it demonstrates the growing recognition of the importance of rent reporting in promoting financial inclusion and equitable access to affordable housing.
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