Crowdfunding is a relatively new idea in real estate financing: soliciting funding online. Crowdfunding could present an alternative funding stream for both residential and commercial buyers and sellers.

Political Advocacy

Current Legislation/Regulation

None at this time. 


Letters to Congress
Issue Summary
NAR Federal Issues Tracker

Legislative Contact(s):

Erin Stackley

Vijay Yadlapati

Regulatory Contact(s):

Erin Stackley

What is the fundamental issue?

The Jumpstart Our Business Startups (JOBS) Act of 2012 is intended to encourage funding of U.S. small businesses by easing various securities regulations, including allowing non-accredited investors to engage in “crowdfunding” activities, and ultimately to increase opportunities for small businesses and startups. The Security and Exchange Commission (SEC) was charged with proposing regulations on crowdfunding.

"Crowdfunding" refers to the financing of an activity through the collective cooperation of people who pool their money or other resources, sometimes through a networking site on the internet. Crowdfunding has been in practice for some time before the JOBS Act was enacted, but now there are federal guidelines in place for many aspects of crowdfunding, including individual investment limits and controlling the way the funds are managed through a third-party platform.

I am a real estate professional. What does this mean for my business?

Crowdfunding could present an alternative funding stream to traditional lending sources for both residential and commercial buyers and sellers.

NAR Policy

NAR policy support laws and regulations that ensure an adequate flow of capital for real estate purposes.  NAR has no policy specific to crowdfunding  at this time.

Legislative/Regulatory Status/Outlook

Regulation A+, or Title III of the JOBS Act took effect in 2015. It is designed to increase capital-raising opportunities for small businesses by making it easier for small businesses to raise capital by removing many of the regulatory compliance hurdles previously in place. The new rules allow companies to raise up to $50 million under Regulation A, which is a less-complicated route in terms of compliance and administration, as the previous limit was $5 million.

The rule exempts companies using Regulation A from registration with state securities administrations. It also establishes two tiers of fundraising:

  • Tier 1: up $20 million in a 12-month period, with not more than $6 million in offers by selling security-holders that are affiliates of the issuer.
  • Tier 2: $20-$50 million - for offerings of securities of up to $50 million in a 12-month period, with not more than $15 million in offers by selling security-holders that are affiliates of the issue. Also subject to ongoing review.

Title IV of the JOBS Act was finalized in October 2015, effective January 2016. The highlights of the rule for Title IV include:

1. Investor/Investment Limits

  • Permit a company to raise a maximum aggregate amount of $1 million through crowdfunding offerings in a 12-month period;
  • Permit individual investors, over a 12-month period, to invest in the aggregate across all crowdfunding offerings up to:
  • If either their annual income or net worth is less than $100,000, than the greater of: $2,000 or 5 percent of the lesser of their annual income or net worth.
  • If both their annual income and net worth are equal to or more than $100,000, 10 percent of the lesser of their annual income or net worth; and
  • During the 12-month period, the aggregate amount of securities sold to an investor through all crowdfunding offerings may not exceed $100,000.

2. Companies that use a crowdfunding platform – Companies that rely on the recommended rules to conduct a crowdfunding offering must file certain information with the Commission and provide information to investors and the intermediary facilitating the offering. The information required is defined in the rule and is similar to what would be necessary for an audit or other financial reporting. There are ongoing reporting requirements for companies that have used a crowdfunding platform to complete a capital raise.

3. Crowdfunding Platforms - A funding portal would be required to register with the Commission on new Form Funding Portal, and become a member of a national securities association (currently, FINRA). A company relying on the rules would be required to conduct its offering exclusively through one intermediary platform at a time.

In May 2016 the Department of Treasury released a report on the state of marketplace lending, including an overview of the existing regulations that are part of the regulatory universe surrounding crowdfunding.

NAR Committee

Commercial Federal Policy Committee



NAR Library & Archives has already done the research for you. References (formerly Field Guides) offer links to articles, eBooks, websites, statistics, and more to provide a comprehensive overview of perspectives. EBSCO articles (E) are available only to NAR members and require the member's nar.realtor login.

Crowdfunding Explained

Guide to Crowdfunding Real Estate Development (Million Acres, May 5, 2021)

Crowdfunding Models: Keep-It-All vs. All-Or-Nothing (Financial Management, Jun. 2020) E

GoFundMe Nation (The Atlantic, Nov. 2019) E

Investor Bulletin: Crowdfunding for Investors (U.S. Securities and Exchange Commission, May 10, 2017)

Rules of Investment (Crain’s Detroit Business, Jan. 11, 2016) E

Real Estate and Crowdfunding

7 Best Real Estate Crowdfunding Platforms for Investing in 2021 (U.S. News and World Report, Mar 9, 2021)

Crowdfunding REITs: A New Asset Class for the Real Estate Industry? (Journal of Property Investment and Finance, 2021) E

When Online Lending Meets Real Estate: Examining Investment Decisions in Lending-Based Real Estate Crowdfunding (Information Systems Research, Sep. 2020) E

Small Investors Swarm Crowdfunding Real Estate Deals (The Real Deal, Jun. 9, 2020)

Equity Crowdfunding for Real Estate Investors (Motley Fool, Mar. 27, 2020)

Crowdfunding Firms Blow Up the Model to Survive in Real Estate (The Wall Street Journal, Jan. 7, 2020)

How Crowdfunding Opens Doors for Real Estate Investors (Forbes, Jan. 7, 2020)

Fixing the Cracks: Real Estate Crowdfunding Platforms Must Focus on Real Estate, Not Just Tech (National Real Estate Investor, Mar. 2019) E

Crowdfunding Moves Beyond Movies and Gadgets to…Real Estate? (Forbes, Jun 28, 2019)

A Legal Approach to Real Estate Crowdfunding Platforms (Computer Law & Security Review, May 2019) E

How Crowdfunding Could Help You Invest in Property (US News & World Report: Money blog, Apr. 8, 2019)

6 Things to Look for in a Real Estate Crowdfunding Investment (Sharestates, Mar. 18, 2019)

Real Estate Crowdfunding Platforms 

Crowdstreet: CrowdStreet is a software and services company disrupting the commercial real estate industry by enabling innovative real estate operators and developers to efficiently engage in online capital formation, communicate with investors, distribute investment documents and centralize ongoing investor relations.

Fundrise: Fundrise is an online investment platform for commercial real estate, often times referred to as a crowdfunding platform or investment marketplace. Fundrise gives investors the ability to: Browse investment offerings based on investment preferences including location, asset type, risk and return profile; Transact entirely online, including digital legal documentation, funds transfer, and ownership recordation; Manage and track investments easily through an online portfolio; receive automated distributions and/or interest payments, and regular financial reporting.

iFunding: iFunding is a real estate investing marketplace that connects thousands of accredited retail investors and institutions with real estate operators seeking financing. We are ‘revolutionizing real estate investing’ through ease of access to high-quality, commercial projects, using our secure web platform, detailed reporting process, and responsive client service team.

Patch of Land: Patch of Land is crowdfunding real estate through its P2RE (peer-to-peer) online marketplace offering various typologies of secured real estate debt on assets backed by first position liens and personal guarantees. We match investors and lenders seeking alternative fixed income opportunities to borrowers seeking alternative sources of financing for their real estate investment needs.

Prodigy Network: Prodigy gives you the opportunity to invest as little as $10,000 in commercial real estate investments that were previously only available to a handful of institutions and ultra-high net worth individuals.

RealtyMogul: RealtyMogul.com is an online marketplace for real estate investing. We are often referred to as a crowdfunding platform, marketplace lender, or peer-to-peer lender. Whatever term you choose to use, we are here to connect investors who want to invest in real estate with real estate companies that need real estate capital – either debt or equity - it’s that simple.

RealtyShares: RealtyShares is an online investment platform that brings together investors, borrowers, and sponsors.  Accredited or institutional investors can invest in pre-identified commercial real estate investment opportunities with as little as $5,000. Legal document signatures and fund transfers can all be handled securely through the RealtyShares platform, so that investors can complete the entire transaction through the website.

eBooks & Other Resources


The following eBooks and digital audiobooks are available to NAR members:

Crowdfunding: A Guide to Raising Capital on the Internet (Kindle, Audiobook, eBook)

Crowdfunding: The Corporate Era (Audiobook, eBook)

The Crowdfunding Handbook (Kindle, Audiobook, eBook)

Crowdfunding for Beginners (eBook)

Equity Crowdfunding for Investors (Audiobook, eBook)

The Everything Guide to Crowdfunding (Kindle, Audiobook, eBook)

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