College tuition, honeymoons, medical bills. Nearly all of life’s major events are now the focus of internet crowdfunding platforms. Add to that list home ownership, with the launch of HomeFundMe on Aug. 14, the first fundraising platform that helps homebuyers raise down payments from friends, family members and anyone who is moved by their stories.
Already the Monterey office of CMG Financial, the San Ramon-based company that owns the HomeFundMe platform, has helped a father and daughter, Jeff and Hannah Smith, raise $6,700 from 18 people in a single day toward a down payment to buy their first home, according to the HomeFundMe Facebook page.
Just like other crowdfunding platforms, the Smiths shared their story on the HomeFundMe website and social media. They chronicled how they had been looking to buy a home for years, and how last year Jeff’s wife died from cancer. They lined up a home to purchase, but “came to a bit of a snag, and do not have quite enough for a down payment,” the story said. Their original goal was to raise $6,100.
People raising money, like the Smiths, must prequalify for a mortgage before using HomeFundMe. Unlike other fundraising websites, no fees are charged to either the donors or the fundraisers. Those fees are paid by mortgage lenders, according to the CMG website. (Company officials did not respond to requests for an interview.)
Donors can give “unrestricted funds,” which can be used by the recipient for any purpose, or “restricted funds,” which means the money is returned to the donor if a home sale does not go through. In either case, the money is a gift, and the donor has no ownership in the home.
Kevin Stone, CEO of the Monterey County Association of Realtors, says he’ll be watching to see how lenders navigate the new concept.
“If it’s a conduit for achieving homeownership for those who otherwise wouldn’t be able to do so, as an industry we’d be cautiously optimistic about it,” Stone says.
(0) comments
Welcome to the discussion.
Log In
Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
PLEASE TURN OFF YOUR CAPS LOCK.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.