Crowdfunding platforms like Kickstarter and GoFundMe are popular ways to raise funds to support a special project such as a documentary film or an invention or to support a family in need after a crisis. Now HomeFundMe, recently launched by mortgage-banking firm CMG Financial, provides a similar service for prospective home buyers.
A recent survey from NeighborWorks America found that nearly 1 in 4 millennials thinks the minimum down payment required is 21 percent. However, a wide range of mortgage programs is available to borrowers with a minimum down payment requirement of 3 or 3.5 percent.
Moreover, there are programs to help borrowers gather the cash for a down payment. The NeighborWorks survey found that 70 percent of adults feel they don’t have enough money for a down payment.
Prospective borrowers can find a variety of down payment assistance programs at Down Payment Resource. In addition, HomeFundMe offers an opportunity for matching funds to increase the impact of gift funds.
HomeFundMe users are incentivized to complete a home buyer education or housing counseling session for a grant opportunity of $1,000 to $2,500. The counseling fee is covered, and, once the education is complete, HomeFundMe will match donations at $2 for every dollar raised up to the grant limits.
To get started, users must get pre-qualified for a loan through the HomeFundMe program. The pre-qualification helps establish your ability to buy a home, your budget and your down payment needs.
The HomeFundMe service can be linked to your wedding registry or a baby registry on other platforms to make it easier to accept donations toward your down payment.
HomeFundMe does not charge any fee, and 100 percent of the funds collected are directly accessible to the user as a down payment. People who donate can make their gifts conditional on you buying a home or unconditional.
If you don’t buy a home within 12 months after the receipt of your first donation, you can keep your unconditional funds. The conditional funds will be returned to the donors.
For more information, visit homefundme.com.