Millennials are buying their first homes with these alternative down payment options
When it comes to buying a house, one of the biggest challenges can be the down payment, especially for millennial buyers. In a recent report, 67% of millennials say they want to buy but haven’t saved anything (yet).
The solution, then? For many, it’s something decidedly millennial: an alternative down payment approach anchored in crowdfunding. For example, CMG Financial’s HomeFundIt program helps would-be homeowners set up a custom crowdfunding page so they can quickly and easily solicit down payment support from family and friends.
Another option is newcomer Loftium which gives buyers up to $50,000 for a new home. The only catch? They must commit to renting at least one room via Airbnb and split the revenues with Loftium.
Also on the rise is the concept of “shared equity” contracts. Unison Agreement Corp. and Landed Inc. offer prospective buyers a down payment, agreeing that part of that property’s future net worth will be contributed to pension funds and other investor groups.
These alternative down payment options represent a major shift in a landscape dominated by traditional banks and lenders—and traditional paths to purchase that don’t necessarily work for today’s prospective buyers. Given these new entrants, there’s no telling how many millennials and otherwise shut-out buyers will be able to dive into homeownership and be better positioned to find the right suburb to call “home.”
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