Groundfloor vs Fundrise 2026: Debt vs Equity, Filings Compared

Corrected October 16, 2026 — Fundrise prospectus date and the 5% exit. Earlier versions of this page gave the date of the Fundrise Flagship and Income prospectuses as April 29 or April 30, 2026. Both are dated May 1, 2026: EDGAR accepted each Form 486BPOS on the evening of April 29, gave it a filing date of April 30 and made it effective on May 1 (Flagship filing index, Income filing index). The fee figures cited are unchanged. We also said the quarterly exit is capped at 5%: the funds’ policy is an offer of at least 5% and up to 25% of shares each quarter, set by the board, and the latest offers were for 5%.

Updated October 15, 2026 — Groundfloor re-checked. Groundfloor's Notes page (groundfloor.com/notes, read October 15, 2026) still lists 5.0% (1-month), 6.0% (3-month) and 8.0% (12-month Signature Note) for investors who are not accredited; its accredited-only Preferred Notes run 7.0% to 9.0%. Groundfloor Finance's own Form 1-SA for the first half of 2026 was still not on EDGAR that day. Trustpilot showed 1.8 out of 5 from 410 reviews.

Updated October 12, 2026 — both sides re-checked against the latest SEC filings. Groundfloor: the FY2025 Form 1-K (filed April 1, 2026) shows $64,854,000 of its $88,373,526 of loans made before 2025 more than 90 days past due (73.4%, our arithmetic), and the auditor again states substantial doubt about Groundfloor Finance Inc. as a going concern (Form 1-K). Its own Form 1-SA for the first half of 2026 was not on EDGAR when we checked on October 12, 2026; the Notes issuer, Groundfloor Yield LLC, filed its 1-SA on October 1 and repeated the going-concern language (Form 1-SA). Fundrise: the registered Flagship fund returned 1.33% in 2025 and 4.03% a year over its five years to December 31, 2025, against 14.43% for the S&P 500 (N-CSR), and 6.03% in the first half of 2026, not annualized (N-CSRS). Its latest quarterly offer to buy back up to 5% of shares at NAV closed September 30 (Form N-23c-3). The merged Fundrise eREIT honored about 2,400,000 of the roughly 7,256,000 shares investors asked to redeem by June 30, 2026 (Form 10-Q), and its October distribution works out to about 0.25% a year at a $9.87 price (Form 8-K). These figures match our Groundfloor review and Fundrise review, both updated October 10, 2026. Correction, October 14, 2026: earlier versions of this page gave Fundrise's fee as 1.0% (0.15% advisory plus 0.85% management); the Flagship and Income fee tables show a 0.85% management fee and no separate advisory fee.

The Quick Comparison

Investment Approach: Equity vs Debt

This is the fundamental difference and it changes everything about the risk profile.

Fundrise pools your money into diversified real estate portfolios — commercial buildings, residential developments, industrial properties. Your money goes into funds, not individual deals: the Flagship and Income funds are registered interval funds, and the eREITs were merged into Fundrise eREIT on April 29, 2026 (Form 10-Q). Your returns come from rental income and property appreciation. It's passive: you pick an investment plan and Fundrise does the rest.

Groundfloor is completely different. You are the lender. Real estate developers (mostly fix-and-flip) borrow money through Groundfloor to renovate properties. You choose which loans to fund based on risk grades (A through G). When the borrower repays, you get your principal back plus interest. Legally, though, what you hold is a Limited Recourse Obligation (LRO) that the offering circular describes as “unsecured special, limited obligations of the Company” (March 2026 offering circular), so you depend on Groundfloor as well as on the borrower. Typical loans last 6-18 months.

Returns: Platform Claims vs Reality

Fundrise Returns

Fundrise reports approximately 7%+ net annualized returns for long-term investors, with year-by-year platform returns from -7.45% to +22.99%; those are company figures for all clients. The audited ones come from the registered Flagship fund: it returned 1.33% in 2025, 4.03% a year over the five years to December 31, 2025 (S&P 500: 14.43%), -11.79% in 2023 and 29.35% in 2021 on a net-asset-value basis (N-CSR), and 6.03% in the first half of 2026, not annualized (N-CSRS). The Innovation Fund (venture capital, not real estate) now trades on the NYSE as VCX: on September 8, 2026 it closed at $38.12 against a $21.70 NAV, and on September 10 it filed to sell up to $1 billion of new shares at market (prospectus supplement). That is an outlier, not a real estate return.

For pure real estate: do not plan on the 7% headline; the audited five-year figure for the Flagship fund is 4.03% a year, and results vary a lot by year.

Groundfloor Returns

Groundfloor markets ~10% average returns. That figure does not appear in its SEC filings. What the filings do show is how past loans ended, by risk grade (loans repaid through August 31, 2024, from the March 2026 offering circular):

The catch: these are repaid loans only, and they say nothing about the loans still outstanding. In the FY2025 Form 1-K, $64,854,000 of the $88,373,526 of loans made before 2025 were more than 90 days past due at December 31, 2025 (73.4%, our arithmetic); loans made in 2025 are carried separately and $936,431 of them were 90 or more days past due (Form 1-K). Real user returns depend on how well you pick loans and how many default. Some Reddit users report 24-35% of their personal loan portfolio in default status at any given time.

Groundfloor Notes (the fixed-rate product) take single-loan defaults out of the picture, but not Groundfloor itself. As of October 7, 2026, Groundfloor listed 5.0% (1-month), 6.0% (3-month) and 8.0% (12-month Signature Note, $1,000 minimum) for investors who are not accredited (accredited investors can also buy 6-, 12- and 24-month Preferred Notes at 7.0%, 8.5% and 9.0%), as we report in our Groundfloor Notes review; Groundfloor says it has repaid Notes on time since 2018, which is a company claim, not an audited figure. The Notes issuer’s first-half 2026 report says that “our auditors expressed in their opinion substantial doubt about our ability to continue as a going concern,” and describes the security for its Stairs Notes this way: “Stairs Notes are secured by a first-priority security interest in the assets of the Company, which consists principally of the intercompany receivables owed to the Company from Groundfloor.” (Form 1-SA) 201cSafer201d is not 201csafe.201d

Fees: Groundfloor Wins Clearly

Fundrise: a 0.85% management fee, but other fund operating costs come on top: the Flagship fund’s May 1, 2026 prospectus puts total annual operating expenses at an estimated 1.78%, and its annualized expense ratio for the first half of 2026 was 2.04% (prospectus, N-CSRS).

Groundfloor: Zero fees on individual loans and Notes. It makes money from borrower fees, not from you: the offering circular lists origination fees “Typically ranging from 2% to 6%” of the loan (offering circular). The Flywheel Portfolio charges a small fee (0.25-1.0%).

This is Groundfloor's clearest advantage. Zero investor fees is rare in this space.

The Default Problem (Groundfloor's Biggest Risk)

I'm not going to sugarcoat this. Groundfloor has a meaningful default problem:

• Loans more than 90 days past due: $64,854,000 of the $88,373,526 of loans made before 2025 (73.4%, our arithmetic) at Dec 31 2025, per the FY2025 Form 1-K (accession 0001104659-26-038396); the 4.71% "platform-reported" rate is a third-party figure absent from its filings
• Repaid-loan history: of 5,547 loans repaid through August 31, 2024, 93.6% repaid in full with interest, 2.5% took a principal loss and only 52.7% repaid on time (March 2026 offering circular)
• Real user experience: Some investors on Reddit report 24-35% of their personal loans in default at any given time
• Trustpilot rating: 1.8 out of 5 from 410 reviews on October 15, 2026 (1.9 from 409 on October 7; see our Groundfloor review), with defaults and slow updates among the main complaints
• What happens when a loan defaults: Groundfloor attempts to recover through foreclosure, but the process can take months or years. Foreclosed real estate on its balance sheet was $34,322,624 at December 31, 2025. Your money is stuck during this time.

Fundrise doesn't have this problem because you're invested in diversified portfolios, not individual loans. One bad property doesn't tank your returns.

How to mitigate default risk on Groundfloor:

• Diversify across 50+ loans (don't put $500 in one loan)
• Stick to Grade A-C loans if you're risk-averse
• Use Notes ($1,000 minimum) to avoid single-loan risk, remembering they still depend on Groundfloor and that their issuer carries going-concern language
• Never invest money you need in the next 12-18 months

Liquidity: Groundfloor Is Shorter on Paper

Fundrise: it depends on the fund, and exits are limited. The Flagship interval fund’s policy is a quarterly offer of at least 5% and up to 25% of its shares at NAV, with the board setting the amount; its latest offer ran from August 28 to September 30, 2026 and was for up to 5%, with no assurance that every tendered share would be bought (Form N-23c-3); it charges no repurchase fee today but may charge up to 2.00% (prospectus). The merged Fundrise eREIT had redemption requests for about 7,256,000 shares by June 30, 2026 and honored about 2,400,000, because the Manager set its quarterly limit at 4.00% of NAV (Form 10-Q). Some legacy products have a 1% early redemption penalty if held less than 5 years, and Fundrise can suspend or ration redemptions during market stress.

Groundfloor: the offering circular says loan maturities typically range from six months to five years, and individual loans are marketed at 6-18 months. When the borrower repays, your principal + interest is returned and no redemption is needed. In practice, only 52.7% of the 5,547 loans repaid through August 31, 2024 repaid at or before maturity, and late loans took 1.41 times their original term on average (offering circular). Notes have fixed terms (1, 3 and 12 months for investors who are not accredited as of October 7, 2026).

Groundfloor’s shorter terms are an advantage on paper, but with 73.4% of its pre-2025 loan book more than 90 days past due, the date your money comes back is not something either platform can promise.

Tax Simplicity

Fundrise: Sends 1099-DIV (for eREITs) and K-1 (for eFunds). K-1s arrive late and are complex to file. If you only invest in the Flagship Fund, you avoid K-1s.

Groundfloor: Sends 1099-INT for interest earned. Simple, straightforward, plugs into any tax software. Interest is taxed as ordinary income.

Both are manageable, but Groundfloor is slightly simpler.

Who Should Pick Which?

My Recommendation

You can use both, but size them very differently. They serve different purposes and carry very different risks.

Fundrise is your core, passive real estate allocation. Put money in, forget about it, let it compound. Start with $10-$1,000 in the Flagship Fund. See our full Fundrise review for a complete breakdown of their returns, fees, and track record.

Groundfloor is a small, active, short-term allocation, not a core holding. Notes ($1,000 minimum) take single-loan defaults out of the picture, but they depend on Groundfloor, whose parent and Notes issuer both carry going-concern language; individual loans carry the default data above. Don't put more than 2-3% of your portfolio in any single loan, and keep the whole Groundfloor position to money you can afford to lose. This is analysis of public documents, not investment, legal or tax advice.

Related coverage

For more on this topic from CrowdfundedWealth:

• Groundfloor vs Arrived Homes — Debt vs equity, the other Groundfloor head-to-head.
• Concreit vs Groundfloor 2026 — $1 vs $10 minimum — which actually wins.
• Groundfloor Notes vs LROs 2026 — Yield-vs-structure decision.
• Best Groundfloor alternatives 2026 — One has a going concern warning.
• Fundrise Review 2026 — Honest take on Fundrise standalone.

Last updated: October 15, 2026 for the Groundfloor Notes rates and Trustpilot; other data as of October 12, 2026. Data sourced from SEC filings: Groundfloor Finance Inc. (FY2025 Form 1-K and March 2026 offering circular), Groundfloor Yield LLC (Form 1-SA, first half 2026), the Fundrise Real Estate Interval Fund (N-CSR, N-CSRS, N-23c-3 and prospectus), Fundrise eREIT (Form 10-Q and Form 8-K) and the Fundrise Innovation Fund (prospectus supplement), plus Groundfloor's own Notes page and Trustpilot as dated company claims. Returns are historical and not guaranteed.