It has just launched in America and may well happen here – a property portal which can be used by people to raise money to buy their own homes via crowdfunding.
The site in Florida says (as do they all) that it could revolutionise the way people buy homes.
Home buyers can use the site to create a campaign and invite people to contribute money to their deposit for a home purchase. The money is held by the site and released directly to the lender once the deposit target is reached.
Aaron Mighty, founder of HomeFunded.com, said: “We have a competitive housing market being dominated by private investors and hedge funds, which is why a start-up like HomeFunded.com is needed to even the playing field in the marketplace today.”
The site allows users to raise small or large sums, but the funds must be used solely for the purchase of a home – and also have to be used within 60 days of a campaign closing. If not, then the funds are returned to the contributors. The site cannot be used by buy-to-let investors.
HomeFunded.com is backed by a collective of US estate agents and was developed with the assistance of the mortgage industry. A mobile app is to launch, allowing users to photograph their favourite home while viewing and immediately launch a down-payment campaign.
The site says campaigns can be successful within seven days.
In the UK, the trend for borrowers and lenders to bypass banks and other usual channels is growing. Crowdfunding is unregulated but peer-to-peer lending is due to be regulated from next April.
With crowdfunding, investors usually get a non-monetary return of some sort (for example, they invest in a soap factory and get bars of soap), whereas with peer-to-peer lending, investors get a financial return based on the level of interest the borrower pays.
The American HomeFunded site does not appear to be offering its investors anything at all, advising that funds do not have to be repaid and can be viewed as gifts.
HomeFunded.com
Comments
This is not required as now the government will supply you a deposit.
Looks as though the site has been active for about a month now, but as far as I can see, no 'donations'
I've seen this work well in other fields, a musician friend from Cambridge has just raised £5,000 from crowdfunding to record an publish a new CD, but I'm not going to hold my breath waiting for it to revolutionise the property market!
And what is the mighty Aaron's cut may one ask?
Got any spare change?
I don't think I have quite understood this, is this another Fanny Mae?