The millennial generation is growing up. Despite the fact that many young adults between the ages of 22 and 37 would like to buy a home, a startling number of them don’t have nearly enough money for a down payment. In fact, Business Insider says that most have less than $1,000 saved for the purchase.
That is where Fundrise enters the picture. In the spirit of crowdfunding, this D.C.-based housing management company has created eFund to help with housing costs for young buyers. This is important since housing prices in most cities (where millennials often choose to live, as opposed to previous generations that traditionally moved out to the suburbs after a certain age) have soared. In fact, the New York Times recently reported that the median cost of a home in California has reached $500,000, which is twice the national average. It might be hard to buy such a property with only a $1,000 down payment.
According to BI,
It’s sort of like crowdfunding for homes: Prospective homebuyers purchase shares (a minimum investment is 100 shares, currently $10 each), the sum of which funds housing renovations and new developments in their city. These investors then get notified through the “eFund Pool” about finished homes, which are offered at up to a 10% lower price than it would be if they were going through a broker.
The eFund’s goal is to construct new housing in popular cities, and help young people find relatively affordable homes, Ben Miller, co-founder and CEO of Fundrise, told Business Insider.
The money raised through the new eFunds goes towards land, renovation, and construction, Miller said. Working with local homebuilders, Fundrise estimates that the program could build between 250 and 750 new homes over the next five years, and 20 homes in Hollywood are already under construction.
EFund investors will have a period of exclusivity to bid on finished homes before they’re opened up to the general public. Even if they don’t purchase a home, they can make money on their investments over time.
While EFund won’t solve all the problems of the millennial generation, it will certainly create a new path for more home purchases by young adults across the country.