The definition of crowdfunding is to use small amounts of capital from a large pool of individual investors to finance something. The concept in and of itself is not a new one, but recent years have brought it from a seldom-used business practice to one that is relatively common in multiple types of business and even in personal life.
The creation and popularity of sites like Patreon, Kickstarter, and GoFundMe revolutionized the idea of crowdfunding. They made crowdfunding approachable to individuals with ideas or needs that they could pay for by appealing to large groups.
These groups don’t just include business investors, but individuals such as you and I. This allows individuals to appeal to other people like themselves and ask for financial assistance with all kinds of things, from exotic vacations to life-changing surgeries.
Down payment crowdfunding
One recent development in personal crowdfunding is the idea of getting help from a large group of individuals to pay for the down payment on a new home. Homeownership is a relatable dream for many people that is often out of reach without assistance.
Two sites, in particular, have been founded that work specifically towards helping people pay for their down payment on a house. These sites are HomeFundMe and Feather the Nest.
HomeFundMe and Feather the Nest
HomeFundMe has been described as, “the first industry-approved crowdfunding service providing homebuyers the support, education and platform they need to crowdfund a mortgage down payment.” Users of this site can start a crowdfunding campaign to pay for mortgage down payment on a new home. HomeFundMe doesn’t charge people to use its services, however, users must finance their home through CMG Financial and have 12 months after receiving their first contribution to close on a house.
Feather the Nest can be used for a wider array of things related to buying a house and the costs of home ownership, but users are charged 5% of each contribution.