Company will pay your down payment on a new house – but there’s a catch
SEATTLE — A new startup is willing to spot you up to $50,000 for a down payment on a house — provided you’re cool with a string of strangers coming into your new home for the first few years.
KING reports Loftium launched Monday in Seattle. It was started by 29-year-old Yifan Zhang after she realized she could cover the mortgage on her new townhouse by renting out the spare bedroom on Airbnb, according to the New York Times.
Here’s how it works:
Loftium uses an algorithm to figure out how much value your spare room has and determine the amount of money it will give you for a down payment. In return, new homeowners agree to continuously list an extra bedroom on Airbnb for one to three years, sending about two-thirds of that rental income back to Loftium.
“It’s for the people who don’t have the parents to help or the high income to save while paying rent,” Zhang says.
Laura Coe, 29, is closing on a home in Seattle on Friday with the help of $9,000 from Loftium—money it would have taken her time to save.
“It allowed me to get in now,” Coe tells KING. “I would have had to wait.”
In its first week, Loftium had 50 home-buyers lined up, the Stranger reports.
There are, of course, some drawbacks to the deal.
Zhang has already hosted about 200 Airbnb guests in her home since last year. And Loftium customers are only given eight “freebie” days per year they don’t have to list their spare room for rent.
There’s also the realistic possibility of cities like Seattle cracking down on Airbnb rentals. Loftium is currently only available in Seattle but may expand to a number of other cities, including Denver and Chicago, in the coming year.
This article originally appeared on Newser: Company Will Front Your Down Payment. Here’s the Catch