Startup fronts down payment if you rent room on Airbnb
JACKSONVILLE, Fla. – Want to buy a house but can't afford the down payment? This startup offers assistance... with a catch.
Would-be millennial homebuyers are encountering a significant barrier of entry when looking to buy their first home, and it has nothing to do with rising home prices or affordability.
According to Zillow, more than two-thirds of renters indicate that saving for a down payment was the most significant hurdle towards achieving homeownership.
A new Seattle-based startup called Loftium is looking to help first-time homebuyers by providing down payment funds in exchange for a share of future Airbnb income.
Homebuyers who need Loftium’s down payment help simply agree to rent out a spare bedroom and split the income with us for 12-36 months after buying their new home.
According to the company, "We know not everyone has access to parental down payment gifts, and we feel strongly that this shouldn’t determine who rents and who buys. More than anything, we believe that with an entrepreneurial attitude and Loftium’s help, anyone can tap into the income potential of spare rooms to become a homeowner."
The pilot program is first being rolled out in Seattle to 50 homeowners and Loftium is working with local lender Umpqua Bank for an end-to-end financing transaction.
On a primary home transaction, Loftium can offer up to $50,000 (not to exceed 10% down) on a conventional Fannie Mae mortgage offered by Umpqua Bank. In a departure from many municipal-based down payment assistance programs, Loftium does not have income limits or home price restrictions.
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