Best Home Equity Sharing Companies

Money’s Main Takeaways

• Home equity sharing is a way of using the equity you’ve gained from your home’s increase in value. You’ll receive cash upfront that you can use for any purpose.
• A home equity-sharing agreement is similar to investing in the stock market, but with a twist: investors pay for a stake in your home’s future value, rather than you investing in the possible future gains of a company’s stocks.
• The advantage of equity sharing is that you don’t have to borrow through a home equity loan, line of credit or cash-out refinance in order to tap your home’s equity. You also won’t have to make monthly payments on any of that borrowing.
• There are risks to equity sharing agreements. You must repay the investment plus a percentage of your home’s equity at the end of the agreement or when you sell the house. If you can’t repay, you run the risk of foreclosure.

Since 2016, Money’s editorial team has researched a wide variety of home equity products. This guide will provide a comprehensive overview of one of those options — home equity investing, also known as home equity sharing. We reviewed how each company operates, the information you need to know before engaging in this type of agreement and its pros and cons to come up with a list of what we consider to be the Best Equity Sharing companies.

The companies below are listed in alphabetical order.

• HomePace: Best Home Equity Sharing for Buyout Flexibility
• Hometap: Best Home Equity Sharing for Fair Credit
• Point: Best Home Equity Sharing for Bad Credit
• Unison: Best Home Equity Sharing for Long Terms
• Unlock: Best Home Equity Sharing for Single-Family Homes

Best Home Equity Sharing Companies Reviews

Why we chose it: HomePace's longer 15-year agreement term and lack of out-of-pocket costs give you more flexibility than most home equity-sharing companies.

HomePace offers co-investment agreements in six states: Arizona, Colorado, North Carolina, Tennessee, Utah and Washington. With credible backing by institutional investors such as pension and hedge funds, HomePace is well-positioned to co-invest with homeowners, giving them cash in exchange for a share of their home's equity.

HomePace can purchase up to 15% of your home's equity, with a maximum investment of $250,000. You don’t have to make monthly payments. Instead, you’ll repay the invested amount at the end of the agreement term or when you sell the house, whichever comes first.

HomePace charges a 3% to 4% origination fee, which is deducted from the funds received by the homeowner, meaning there are no out-of-pocket expenses. You must have a credit score of at least 630 to be eligible, which is higher than some other companies. The company was recently acquired by and is now a subsidiary of EasyKnock.

Why we chose it: Hometap is an exceptional choice for homeowners with fair credit seeking to leverage their home equity.

Although you can qualify with Hometap with a credit score as low as 500, you’ll get better terms if your score is 600 or more. Their maximum investment is $600,000 and the repayment term is 10 years, which is a little shorter than some competitors offer. You won’t have to make monthly payments, but you will have to pay the agreed-upon percentage of your home’s value at the end of the term.

Hometap won't do a hard pull on your credit until you submit an investment application. This means getting an estimate won't negatively affect your credit score, which can be a significant consideration if you're shopping around or are working to improve it.

The biggest disadvantage to Hometap is the short repayment term. As with all equity sharing agreements, you may have to sell the home if you can't repay within the agreed-upon term.

Why we chose it: Point requires a minimum credit score requirement of only 500+ to qualify for home equity investment and has a term of up to 30 years, which provides greater flexibility to plan an early repayment strategy or prepare for the end of the agreement’s term.

Point's shared equity agreement allows homeowners to access between $25,000 and $500,000 of their home equity, with a term length of 30 years. Customers control when they exit the partnership during the term. While Point charges a 3.9% to 5% processing fee and requires an appraisal visit that costs between $500 and $820, you don't have to pay these fees upfront. Point doesn't impose a penalty if you pay the investment back early.

Point also offers a lot of flexibility in loan terms. You can settle your home equity investment any time within the 30-year term, paying back the initial sum received along with a percentage of the change in the home's value. Point also allows investments in rental properties, though at a premium.

The company is also working on a new partnership agreement, called SEED, which would offer prospective homebuyers a one-time payment equal to 15% of the down payment on a house in exchange for a portion of the home’s future appreciation.

Why we chose it: Unison has extended 30-year term options, significantly surpassing most competitors' offerings. This extended timeframe offers you greater flexibility and ease in managing your financial obligations while benefiting from Unison's investment in your property's value.

Unison is currently available in 29 states and Washington, D.C. Unison invests up to 15% of your home's current value in exchange for cash and shares in the home's increase or decrease in value. Investment amounts range from $30,000 to $500,000.

You can settle your agreement with Unison by repaying before the term ends, selling your house or refinancing. However, be aware that Unison will not share in any loss of value if you opt for a buyout. There’s also an initial five-year restriction period where Unison does not share in any loss in value if you sell the home.

In addition to its home equity investment products, Unison now offers an equity-sharing home loan — a second mortgage that offers below-market rates and deferred interest payments that keep your monthly payments low. The maximum loan amount is $400,000.

Unison charges 3.9% of the investment amount as a transaction fee and other costs, including appraisal fees ranging from $450 to $1,050 and settlement costs between $700 and $1,750. Unison also doesn’t allow you to rent out your home while the agreement is in effect and while customer reviews are generally positive, they do caution about third-party fees.

Why we chose it: Unlock has a large investment cap and provides a likely chance of higher investment if you live in your home.

Unlock caps investment amounts at $500,000, but the exact amount will depend on four criteria: current home value, existing house debt, creditworthiness and property utility. Although Unlock does invest in rental property, you're more likely to be approved if the home is your primary residence. You'll need to verify the rental income if you rent the home out.

You can buy out Unlock's position at any time within the 10-year term length without penalty. Buyout options include paying a lump sum or installments. You may, however, end up paying back a significantly higher amount than you initially received: the company may give 10% of your home's equity today in exchange for 20% of its future value.

Closing costs include a 4.9% origination fee. Additionally, you may need to cover home appraisal costs and other expenses. Customer reviews mention the possibility of receiving funds with imperfect credit and large investments as positives. However, the service is limited to 15 states, and there is a risk of losing the home if the equity is not bought back by the end of the 10-year period.

Other home equity sharing companies we considered

We evaluated home equity sharing companies on investor credibility, investment amounts, fees and buyout costs and options, eligibility requirements, term lengths and customer reviews. The following companies have competitive offerings but weren’t chosen for our best-of list because they didn’t stand out above others in any specific category.

EasyKnock

EasyKnock operates a little differently than most equity-sharing programs. Their Sell & Stay program is a short-term program that allows property owners to receive up to 75% of their home’s value in cash and offers the option to repurchase the home later.

Instead of repaying the equity in 10, 15 or 30 years, you'll lease your house from EasyKnock for up to five years, which means you'll be making payments to stay there. If the property appreciates during this time, you can benefit from that appreciation. However, the fact that you’ll have to pay rent, the short term of five years and the necessity of adding them as co-owner limit its usefulness.

EquiFi

EquiFi has a lot of promise in the home equity-sharing industry. It’s the only company whose buyout options are event-driven rather than defined in time limits, meaning you can repay the investment at any time or when you sell your house. Other events, such as the homeowner's death or default on the mortgage, are also buyout triggers. However, EquiFi is extremely new and only available in California, so it's not widely available enough to be a top choice.

QuantmRE

QuantmRE pays between 10% and 30% of a home's current value in exchange for a share of its future appreciation or depreciation. QuantmRE places a lien on the property to secure the agreement. The approval process mainly involves evaluating the home's equity and potential for an increase or decrease in value rather than the owner's credit score. However, the lack of transparency, potential for high costs in the case of property appreciation and unclear terms in depreciation scenarios — along with the young nature of the company — eliminated it from our top picks.

Home Equity Sharing Companies Guide

Homeowners have gained significant equity over the past few years due to rising home prices. The most recent data from analytics firm CoreLogic shows homeowners with mortgages have gained more than $1 trillion year-over-year during the second quarter of 2024.

That translates into an average of $315,000 per mortgage holder — a large source of cash that can be accessed through various home equity products. Equity sharing is one of the more recent options homeowners can choose.

Home equity-sharing companies offer a way to unlock that equity without taking out a new loan or making monthly payments, something even the best home equity loans can't offer. These companies are not lenders but investors who are willing to advance the owner a lump sum in exchange for part of the home’s future value.

Before deciding which home equity sharing company is right for you, learn how equity sharing works to ensure it's the right choice. Always consider factors such as customer service, terms of agreements, and reputability to ensure you make the most informed decision possible.

What is home equity sharing?

Home equity sharing is a financial arrangement in which a homeowner sells a percentage of the equity in their home to an investor or a company in exchange for a lump sum of cash. This cash can be used for various purposes, such as home improvements, paying off student loans or high-interest debts like credit cards or investing.

How does home equity sharing work?

Unlike a traditional home loan or home equity loan, the homeowner doesn't take on debt, pay an interest rate or make monthly payments. Instead, when the home is sold or the agreement ends, the investor receives a share of the home's appraised value, which may have increased or decreased since the initial agreement.

Credit score and income requirements are more lenient than on traditional loans. Equity sharing is an alternative financing option for people who have high amounts of equity but can’t qualify or afford to make payments on a second mortgage or other type of loan.

This arrangement allows homeowners to access the increased value resulting from their home's appreciation while sharing the risks and rewards of homeownership with an investor. Here's how it typically works:

• Select an equity-sharing company: Before you begin, select a reputable equity-sharing company or investor. It's crucial to do thorough research and consult a financial advisor.

• Application process and approval: After you’ve selected the investment company you want to work with, apply for an equity sharing program. This usually involves submitting financial documents and information about your property. The company will then assess your eligibility based on your credit score, existing equity in your home and the property's location.

• Property appraisal: The company will professionally appraise your property to determine its market value and the amount of equity you have. This appraisal is fundamental as it sets the baseline value of the shared equity. Each company will reduce that value by up to 20% as a risk adjustment if the home depreciates.

• Contract negotiation: Once you've established the value of your home, you'll negotiate with the investor. The talks will include discussions about the portion of your home's equity being sold, the share of appreciation or depreciation the investor will receive, and any applicable fees or charges.

• Legal agreements: After negotiations, you'll have to sign legal agreements. These documents should clearly outline the terms and conditions of the equity-sharing arrangement. It's highly advisable to have a lawyer review these agreements.

• Receive funds: Once the equity sharing agreement is signed, the investor will provide the agreed-upon funds. You may use this capital for any purpose, such as paying off debts, making home improvements or investing.

• Ongoing responsibilities: During the agreement term, you'll continue to be responsible for mortgage payments (if applicable). Similar to a reverse mortgage, you’ll also need to stay current on property taxes, insurance and maintenance. Your agreement might also specify conditions for how you must maintain the property.

• Monitor property value: The value of your property may fluctuate throughout the equity sharing agreement. Keeping track of this is essential as it will affect the final settlement.

• Settlement options: There are different ways to settle equity-sharing agreements. You might buy back the equity at market value, sell the property and share the proceeds or refinance the home to pay off the investor.

• Exit fees and sharing appreciation or depreciation: Upon settlement, there may be exit fees or other pricing. Additionally, if your home's value has changed, the investor will receive a share of the appreciation or bear a share of the depreciation, as agreed upon.

The pros of home equity sharing

By selling a portion of the equity in your home, you can receive a lump sum of money or a series of payments. This approach offers various benefits catering to different financial needs and goals. Home equity sharing presents several advantages, from avoiding additional debt to having the freedom to use funds without restrictions.

Access to funds without taking on additional debt

Home equity sharing enables you to tap into the value of your home without borrowing money. You receive a lump sum or a series of payments in exchange for a share of your home's equity. Unlike a traditional loan, you don't incur debt, and no interest accumulates over time.

No monthly payments

One of the biggest benefits of home equity sharing is that there are no monthly payments involved, so it won’t be a hit to your cash flow. Since you're not taking out a loan, you don't have a repayment schedule to adhere to. This can be a relief, especially if you're on a tight budget or have variable income. It gives you more financial breathing room than a home equity loan or line of credit, which would require regular payments.

Flexibility with how the funds can be used

You can use the money in any way you see fit. This can range from making home improvements, paying for education, investing in a business, or even taking a dream vacation. This flexibility allows you to prioritize your financial goals and make decisions best suited to your circumstances.

The cons of home equity sharing

While home equity sharing offers an array of benefits, it's crucial to weigh the immediate financial relief against the long-term implications for ownership and financial flexibility.

Loss of full ownership

When you enter into an equity-sharing agreement, the investment company becomes a secondary lien holder, much like a traditional mortgage lender. You still retain your position as owner but you may have less control over certain decisions, such as renovations or refinancing.

The investor also shares any future appreciation in your home's value. This means you may not reap the full benefits if your property value increases significantly. Additionally, some agreements may have constraints on how to use or alter the property, which may not align with your plans or preferences. If you don't want to give up control, you may be better off if you get a home equity loan or home equity line of credit (HELOC).

Risks associated with both appreciation and depreciation

If your property appreciates, you'll have to share that appreciation with the investor based on the equity percentage they own. This can mean parting with a substantial sum when the agreement concludes. Conversely, if your property decreases in value, the investor may still be entitled to a return on their investment, meaning you owe more than anticipated. Real estate markets can be volatile, and predicting how your property will fare over the term of the agreement means taking on a certain element of risk.

Having to make a lump sum payment

At the end of the equity sharing agreement, you will likely have to make a large balloon payment to the investor. This payment can be substantial, particularly if the property has appreciated significantly. If you don't have the funds readily available, you may need to sell your home or take out a loan to repay the investor.

Having to make such a large payment can affect your financial situation and future plans, as it can eat into a portion of your savings or income.

How We Chose the Best Home Equity-Sharing Companies

Our methodology for creating the best home equity sharing companies list included the following criteria:

• Investor credibility: We evaluated each company's trustworthiness, including where and how the company obtains funding.

• Investment amounts: We considered the percentage of ownership the investment company will loan against and the maximum investment limits.

• Total costs: We looked at all of the fees and buyout costs, including origination fees and prepayment penalties.

• Buyout options: We prioritized companies that offered more flexibility in buyout options, including term lengths, selling and repayment.

• Eligibility requirements: We gave higher rankings to companies that were more lenient with eligibility requirements, such as credit score and minimum loan-to-value ratios (ltv).

• Customer reviews and satisfaction: We evaluated companies based on customer feedback and ratings.

Summary of Money’s Best Home Equity-Sharing Companies of 2024

The companies below are listed in alphabetical order.

• HomePace: Best Home Equity Sharing for Buyout Flexibility
• Hometap: Best Home Equity Sharing for Fair Credit
• Point: Best Home Equity Sharing for Bad Credit
• Unison: Best Home Equity Sharing for Long Terms
• Unlock: Best Home Equity Sharing for Single-Family Homes