Is it fair that the upside from any capital gains is mostly enjoyed by the developers while the first 20% of any capital loss is borne by homebuyers?

FundMyHome works because developers only receive 80% of the home price upon sale. The balance of 20% is only earned at the end of Year 5, provided the home price appreciates by 20%.  Otherwise, the developer forfeits the 20%.

That 20% is set aside to pay a fixed 5% interest rate to institutional investors over the 5-year period,acting to incentivise them. Without a fair return, it would not be possible to attract investors  to fund 80% of your home.

In short, the first 20% of capital gains paid to the developer at the end of Year 5 is a repayment of their 20% set aside upon sale of the home in order to pay the 5% interest rate to the investors.   Developers will never get more than the original selling price of the house.  Instead, they risk losing up to 20%, even if the house price stays unchanged.

FundMyHome aligns the interests of developers and homebuyers such that developers are incentivised to uplift the value of your property.