If Fannie/Freddie is willing to allow this, how much longer will they require a down payment? From cnbc.com:
Most business crowdfunding platforms offer returns on the investment, but this has none — it is simply a gift. George said the individual gifts will be small, in the $50 to $250 range. The platform can be linked to wedding and baby registries.
“You’re going to spend $250 on a coffee making machine? If that $250 goes to a down payment of your home, at the very least, I improve your quality of life and the second thing I do is I give you some, today, some tax deductibility,” George added.
As an incentive for encouraging prospective homeowners to attend credit education courses and counseling, borrowers can also receive grants of up to $2,500 once they’ve completed the free classes. After that, the platform will match donations at $2 for every $1 raised, up to $2,500.
“Folks that go to counseling tend to be more informed, and they also tend to be better borrowers,” George said. “We’ve looked at this as advertising dollars and have said, listen we think this promotes homeownership, we think it’s something that we would otherwise spend either through the internet or through social media. We’ve put our money here where we think it has its best use.”
On the other side, contributors are also assured that the money will in fact go to fund the home purchase and can make their gift conditional on that.
The idea is not just to raise money for the down payment but to add to the borrower’s existing funds. This can help eliminate the need for mortgage insurance, which is required on very low down payment loans. Fannie Mae is calling it a “pilot project,” and will be watching the results closely.
“What we’re doing today is we’re trying to test and learn a variety of solutions because the preferences for today’s homebuyers have changed significantly, and there is no silver bullet to solving a problem that’s as hard as how do you find a down payment,” said Jonathan Lawless at Fannie Mae. “What we prefer to do is source ideas from all sorts of different places. Our customers are a major one, lenders who are dealing every day with people trying to buy homes, and instead of trying to take those ideas and spend three years trying to roll out a major change, we’d rather test and learn.”
Crowdfunding your way into home ownership. Here’s how from CNBC.
Also from the article:
“I have qualms with anybody getting a loan who can’t put some down payment down themselves. Those types of borrowers typically are one water heater away from missing their payments, going into default, maybe losing the house to foreclosure,”
Renting is generally cheaper than home ownership, at least in the first 5-10 years, so if you can’t save for a down payment while renting, you are going to be strained financially by buying a house. IMHO, this type of program would benefit the RE industry more than the consumer.
Hi, I’m new to “Pay For My Crap” webpage, so if anyone needs more info, hit me up in email.
So, I want a Range Rover Velar First Edition P380. If you google it, you’d have to admit it has what anyone would want in an SUV, without going full Porsche. I have been advised “never go full Porsche” on sites like this, and while a Porsche SUV would be ideal, I know there something called, “Effing Greedy,” and I respect that.
As Range Rover lover’s know, roving ranges is not cheap, done properly, this activity costs a lot to insure and service, and the vehicle requires Premium gas. Every time I fill up, I’ll be paying a lot more than you, most likely.
Here’s where you, the reader comes in. If all of you would commit just $10-$1,000 dollars, I could get the Range Rover I want, and mitigate all the shortcomings mentioned above, significantly. Imagine me flying down the 405 in my new Range Rover, without being weighed down by the significant (for me) financial burden, let alone buyer’s remorse. I can see you smiling as you think of me. Come on! You’re smiling!
Some of you may be saying, “I’d love for you to have that, Daytrip, but I can’t afford it right now.” Well, just throw it on a credit card that offers the longest time to pay it back! Boom! I don’t want to shame anyone, but $10 or $1000 isn’t going to break you, if you plan it out intelligently.
For those who may query, “Why don’t you just pay for it yourself, or get a Ford?”
I think everyone reading this has said to themselves, at one time or another in their lives, especially you married folks, “I could… but I just don’t want to.”
Regardless of your political beliefs, I think we can all agree that Uber is for losers, while paid off, fully insured Range Rover’s are for those who must rock… every day.
Help me rock.
Click that PayPal thing, and give until you question your sanity.
Paypal is love. And that’s really all you need… isn’t it?