The opportunity
Half the country cannot clear a credit check, and the model that answers it is already 60 years old
Interest rates and credit gates have separated the people who can afford a home from the people allowed to buy one. Consorcio was invented in response to the same conditions, in another country, and has run under a central bank regulator ever since.
The problem
Ownership priced out and gated off
Two separate barriers stack on top of each other. The cost of borrowing has risen sharply, and the approval process was already closed to a large share of the population.
- Average mortgage rate
- 7.2%
- Per year. The same $400K home costs $1,040/month more in 2024 than it did in 2021.
- Interest on a 30-year $400K mortgage
- $559,000
- Close to the value of the home again, paid in interest alone.
- Americans without adequate credit
- 47%
- Subprime or no credit file at all.
- Average down payment required
- $88,000
- Due before the first mortgage payment is ever made.
- Immigrants in the banking system
- Excluded
- Without an SSN or a credit file there is no access, regardless of income.
Millions of people are not excluded for lack of effort. They are excluded for lack of an alternative.
The mechanism
How consorcio works
It replaces the lender with the group. Nobody borrows, so nobody pays interest.
- 01
Members join a group
Each member commits to a fixed monthly contribution toward a defined credit value, over a term between 24 and 360 months.
- 02
Contributions pool
Money is held in segregated accounts at FDIC-insured U.S. banks. It funds the group's purchases, not the partnership's balance sheet.
- 03
The group allocates
Each month members are selected on objective criteria: bid amount if any, payment punctuality, and seniority in the group. No lottery.
- 04
A credit letter is issued
The selected member receives a credit letter and buys the asset outright, as a cash buyer. Contributions continue until the term completes.
Allocation timing is not guaranteed and is not promised to any member on any date. Some members are selected early in the term and others late, which is a condition of the model rather than a limitation of it.
Track record of the model
Sixty years of operating history in Brazil
The figures below describe the consorcio model across the Brazilian market. They are not NWX's own results, and are shown to establish that the mechanism works at scale over decades, under a central bank regulator.
- Origin
- Brazil, 1960s
- Created as an answer to high interest rates, the same problem the U.S. market has now.
- Regulator
- Central Bank of Brazil
- Law 11.795/2008. Over 60 years of institutional history.
- Active participants in Brazil
- 12.76 million
- Brazilian market figure for the model as a whole, not an NWX figure.
- Credit letters delivered in Brazil
- R$1 trillion
- Brazilian market figure for the model as a whole, not an NWX figure. No interest charged at any point.
- Administrative load
- 19% fixed
- 5% reserve fund, 2% D&O insurance, 12% operations. Fixed from day one. No interest.
- Member documentation accepted
- Passport, ITIN, SSN, EIN
- No minimum credit score and no bank approval in the enrolment path.
Why now
The conditions that created consorcio in Brazil are the conditions in the U.S. today
Brazil built this model in the 1960s because interest rates made borrowing irrational for ordinary buyers. The United States now has a large population facing a version of the same problem: rates that roughly double the lifetime cost of a home, and an approval system that screens out anyone without an established credit file.
There is also an audience here that already understands the product without being taught. Brazilian and Latin American communities in the U.S. know what a consorcio is, know what a credit letter is, and are currently served by subprime lenders and informal savings clubs that offer neither legal structure nor protection.