Now you can crowdfund home down payments– something that only became possible over the past year or so.
Lenders have traditionally only allowed potential home buyers to accept down payment help from family or very close friends: the borrower had to provide the name of the gifter, date, and the amount they gave you. Plus, it was supposed to truly be a gift. You weren’t allowed to repay anyone who gave you that money.
In the past year, this requirement seems to have loosened up, and just in the nick of time: The housing market favors sellers and not buyers, because of how high prices have gotten in most markets across the U.S. That’s making it harder than ever for people to come up with a down payment. This makes it imperative to consider whether to crowdfund home down payments.
Can You Crowdfund Home Down Payments?
You can crowdfund home down payments through sites like GoFundMe, but in October a site dedicated to this purpose launched: HomeFundMe is run by mortgage lender CMG Financial. There are no fees to use the platforms and the site is backed by Fannie Mae and Freddie Mac.
CMG Financial, a mortgage lender, just launched HomeFundMe, the first online platform that allows borrowers to crowdfund the down payment on a home purchase without fees and with the backing of mortgage giants Fannie Mae and Freddie Mac.
People on the platform can also qualify for grants (up to $2,500) if they take classes on credit education and credit counseling. Once people have taken these classes, HomeFundMe will match every $1 raised with $2 of their own, again up to $2,500.
Crowdfund Home Down Payments
However, HomeFundMe seems like it has stronger fundraising potential because it creates incentives to the individuals to try and earn grants, plus there’s educational content.
If you don’t foresee saving up tens of thousands of dollars for your down payment, you should consider whether to crowdfund home down payments.
Looking for more great articles? Try these:
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- Down Payments – the New Wedding Gift?
Kara Perez is the original founder of From Frugal To Free. She is a money expert, speaker and founder of Bravely Go, a feminist financial education company. Her work has been featured on NPR, Business Insider, Forbes, and Elite Daily.