The 3 Best Home Equity Agreement (HEA) Companies That Want to Invest in Your Home

A home equity sharing agreement is an agreement between you and an investment company in which you receive a lump-sum cash payment in exchange for a portion of your equity.

It is not a loan or form of debt, so there are no monthly payments, and the eligibility requirements are more lenient.

We’ll guide you through the nuances of how a home equity sharing agreement works, which companies are the best, the benefits and downsides, and more.

Reviews of the 3 best equity sharing agreements

We believe the best home equity sharing companies offer excellent terms, reliable financial support, and a consistent customer experience. Here’s why we made our selections.

• Best overall: Hometap
• Best for longer terms: Point
• Best for partial payments: Unlock

If you are new to this type of equity product, you may want to read up on what a home equity agreement is and how it works before diving into the best companies.

Your location is also a major determining factor in which HEA options are available to you, due to state-level legislation and regulation. Check state eligibility below.

Hometap

Best Overall

4.8 _/5

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Why Hometap is one of the best

Founded in 2017, Hometap wants to make homeownership less stressful and more accessible. It’s our choice as the best for flexible qualification because it can provide a financing solution to homeowners with credit scores as low as 500 in as little as three weeks.

• Excellent customer reviews: Hometap has an excellent rating of 4.9 out of 5 on Trustpilot from 3,261 customers as of May 17, 2024.
• No monthly payments: Since Hometap invests in your home, there are no monthly payments.
• Funds can be used on anything: There are no restrictions on how you use the cash you receive.
• Widest funding range: Hometap offers the smallest investment amount ($15,000) and the largest ($600,000).
• Shares in future depreciation: Hometap will make money if your home appreciates during the term. If your home depreciates, Hometap will share in that loss.
• Lenient financial requirements: There are no income requirements and it accepts a broader range of credit scores, with a minimum of 500.

• Cash value is lower than exchanged equity: Hometap receives a percentage of your home’s equity that ranges from 1.5 to 2 times the original equity stake depending on the length of time you hold the investments.
• Only available in 16 states: Arizona, California, Florida, Michigan, Minnesota, New Jersey, New York, Nevada, South Carolina, Ohio, Oregon, Pennsylvania, Virginia, Utah, and Washington.

Funding	$15,000 – $600,000
Term length	10 years
Credit score	500+
Prequalify	Get an estimate in just 60 seconds

What to keep in mind

Hometap accepts homeowners with a minimum credit score of 500. No income requirements apply, and you can get an estimate without a hard credit check.

Stipulations may apply if you live in a flood zone. Hometap offers equity-sharing agreements to homeowners who live in floodplains, but only if they have appropriate flood insurance. Manufactured homes in flood zones are ineligible for a Hometap equity sharing agreement. 

Application process

You can receive funds in just four steps:

1. Fill out a quick online form that will prequalify you and provide an estimate of how much money you’re eligible for.
2. A dedicated Investment Manager is assigned to your account to answer any questions you may have. 
3. If you agree to the terms in the estimate, a home appraisal is scheduled to determine the final terms of the agreement. 
4. You’ll sign the final offer and get your funds within a few days of closing.

Point

Best for Longer Terms

4.6 _/5

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Why Point is one of the best

Founded in 2015, Point was built after its team members experienced firsthand the frustrations of homeownership and debt financing. It’s one of the best because it is available in more states than our other picks, and it is the only one that made our list with a 30-year term.

The benefit of a longer term is that homeowners can spend more time stabilizing their financial situation to pay off existing debts before refocusing their efforts on setting aside the necessary funds to buy out Points position in the home.

• No monthly payments: Since Point invests in your home, you owe nothing until the end of your term or when you decide to exit the contract.
• Funds can be used on anything: There are no restrictions on how you use the cash you receive.
• Shares in future depreciation: If your home depreciates, Point may share in that loss.
• Lenient financial requirements: There are no income requirements, and bad credit, 500 and up, is accepted.

• Cash value is lower than exchanged equity: Point receives a percentage of your home’s equity valued higher than the cash you receive.
• Only available in 23 states: Arizona, California, Colorado, Florida, Hawaii, Illinois, Indiana, Massachusetts, Maryland, Michigan, Minnesota, Missouri, New Jersey, New York, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Utah, Virginia, Washington, and D.C.

Funding	$25,000 – $500,000
Term length	30 years
Credit score	500+
Prequalify	Get an estimate in just 60 seconds

What to keep in mind

Point looks for a minimum FICO credit score of 500. Your home must be worth more than $155,000, and you must retain at least 30% of the equity after the investment.

Investments are not offered on commercial properties, manufactured homes, modular homes, mobile homes, properties with five or more acres, properties with an LLC ownership, or co-ops. Its investment must be in at least the second lien position.

Application process

The application process can be completed in five steps. First, you’ll fill out a prequalification form to get a cash estimate. If you’re eligible, Point will have you schedule time to speak with a member of its team who can answer any questions.

Once all your questions are answered, you’ll be instructed to fill out an online application for Point to review. After Point reviews the application, a third-party appraiser will be selected to determine the value of your home for the final offer.

You’ll be asked to sign the closing documents if you agree to the terms in the final offer. Once the documents are signed, your funds will be transferred to your bank account.

Unlock

Best for Partial Payments

4.5 _/5

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Why Unlock is one of the best

Founded in 2020, Unlock employs a team of experienced home equity agreement professionals who strive to help homeowners utilize the equity in their homes to get the cash they need.

It accepts partial buyout payments, a feature other equity-sharing companies don’t offer. You won’t incur interest charges because you have no debt to repay. Unlock makes money if your home appreciates during the equity sharing term; should the home depreciate instead, Unlock shares in the loss.

• No monthly payments: There are no interest charges. You can buy out Unlock’s position any time before the end of the term.
• Funds can be used on anything: There are no restrictions on how you use the cash you receive.
• Partial buy-out payments: Unlock is the only company that lets you buy out its position with partial payments throughout the term.
• Shares in future depreciation: If your home value decreases, Unlock will share that loss.
• Lenient financial requirements: No income requirement for credit scores above 550, and poor credit is accepted.

• Cash value is lower than exchanged equity: Unlock receives a percentage of your home’s equity valued higher than the cash you receive.
• Only available in 14 states: Arizona, California, Florida, Michigan, New Jersey, North Carolina, Oregon, Pennsylvania, South Carolina, Tennessee, Utah, Virginia, and Washington.

Funding	$30,000 – $500,000
Term length	10 years
Credit score	500+
Prequalify	Get an estimate in just 60 seconds

What to keep in mind

Unlock looks for a minimum FICO credit score of 500. Income verification may be required if your score is below 550. Its investments are available for most residential real estate (single-family, condominiums, 2- to 4-unit properties, and townhomes), including owner- and non-owner properties.

You won’t be eligible if you have a bankruptcy, foreclosure action, short sale, or deed in lieu within the previous five years or have any 90-day mortgage delinquencies within the prior 24 months.

You’ll need to maintain hazard insurance equal to the replacement cost of your home during the 10-year term. Unlock must be named on all property insurance policies as a “mortgagee” or “additional interest.” If approved, you will receive funding within 30 to 60 days.

Application process

You can get an initial cash estimate in just 60 seconds by completing an online form. If you like the terms outlined, you can complete an application and schedule a call with a representative who will walk you through your Investment Estimate.

If the terms are accepted, an appraisal will be done to determine the value of your home for the Investment Closing Statement. Once the final documents are signed, the funds will be wired to your account.

How does a shared equity agreement work?

A shared equity agreement allows you, the homeowner, to pull equity from the home in cash without taking out a loan. In return, the investing company gets a percentage of the future value of your home. The company collects its equity share when you buy out the agreement or sell the property.

There are two repayment models that most home equity sharing companies follow:

1. You pay back the initial amount borrowed plus a predetermined percentage of any appreciation
2. You pay back a predetermined percentage of the new appraised value of the home

Contract terms may last 10 to 30 years. Should your home lose value during the contract term, the investing company shares in the loss. The amount you repay will be less than what you’d owe had the home maintained the same value throughout the term.

Here’s an example of how it works using the first repayment model. It shows how much a homeowner who received $25,000 in exchange for 20% of their equity would owe at the end of their term.

	Appreciated home	Depreciated home
Starting home value	$500,000	$500,000
Valuation adjustment*	5%	5%
Adjusted home value	$475,000	$475,000
Home value at repayment	$575,000	$375,000
Equity being shared	20%	20%
Principal funding amount	$25,000	$25,000
Amount you owe	$45,000 ($25,000 principal + 20% of the $100,000 appreciation)	$5,000 ($25,000 principal – 20% of the $125,000 depreciation)

How much money can you receive through a home equity sharing agreement?

Companies advertise you can get up to $600,000 through a home equity sharing agreement. But the real amount you’ll receive is determined by a combination of factors: 

• Your home’s current value. The more your home is worth, the more money you can access. 
• Your remaining mortgage balance. Equity is the difference between your home’s current value and your remaining mortgage balance. If your home is worth $500,000 but you owe $300,000, your equity is $200,000 or 40%. 
• The company’s maximum loan-to-value (LTV) ratio. Each company has its own maximum LTV ratio you need to meet to qualify for a home equity sharing agreement. For example, Hometap’s maximum LTV is 75% (meaning you need at least 25% equity in your home), while Point’s is 80% (meaning you need at least 20% equity).
• The length of the investment. Many home equity sharing agreements last 10 to 30 years. Longer terms may allow you to access more funds, but you’ll be sharing a portion of your home’s appreciation for longer.
• Your credit score. Your credit score will also determine your maximum borrowing limit. Many home equity sharing companies have credit score requirements as low as 500, but you’ll stand the best chance of borrowing the maximum amount if you have excellent credit.
• How you use your property. Many home equity sharing companies will only invest in primary residences—investment properties and second homes don’t count.

Getting estimates directly from lenders is the most accurate way to know how much you could get.  

How to calculate the potential costs of an equity sharing agreement

There are some common fees you should know about before getting a home equity share agreement. These can include origination or investment fees, appraisal fees, and closing costs. 

• Closing costs. These fees cover the cost of processing your agreement and can vary by company. Hometap charges a 3.5% investment fee, for example.
• Appraisal fees. You’ll need to pay for a home appraisal to determine your home’s value. These fees can cost anywhere from $299 for a virtual appraisal to $500 to $1,000 for an in-person appraisal.  
• Title charges. These include things like attorney fees and settlement costs. They can cost around $800 to $1,200 depending on your location. 
• Filing fees and government recording fees. Some states and counties require additional fees, which can cost anywhere from $370 to $1,000.
• Equity is being shared. This is the percentage of your home’s future value that the home equity sharing company will receive once your investment term expires or you sell the home. While you don’t pay this cost upfront, you need to understand how it will impact your future finances.

For example, let’s say you receive a principal funding amount of $25,000 in exchange for 20% of your home’s future value. If your home appreciates from $500,000 to $600,000 during the investment term, you’ll owe the company $45,000 ($25,000 principal + 20% of the $100,000 appreciation).

However, you may pay $2,344 to $4,075 upfront in closing costs, title charges, appraisal fees, and other expenses.

Benefits and downsides of a shared equity agreement

Pros

• Liquidity without debt

  One of the most appealing aspects of home equity sharing is the ability to liquidate part of an asset without accruing debt. This can especially benefit retirees with difficulty qualifying for traditional loans due to fixed or limited income.

• No monthly payments

  Unlike home equity loans or home equity lines of credit, equity sharing does not require monthly payments. This can relieve financial pressure on individuals managing tight budgets, especially in retirement.

• The investment company shares in the risk

  If the value of your home depreciates, the company co-investing will share in that loss, meaning you may owe less than the original investment.

• Perfect credit is not a requirement

  Unlike many traditional loans, bad-credit borrowers are often eligible for this arrangement.

• No minimum income requirements

  Because monthly payments aren’t required, companies might offer low-income borrowers an option they don’t have with other loan types.

Cons

• You could miss out on growth.

  You won’t fully benefit if your home appreciates significantly because the investment company owns some of the equity.

• You need sufficient equity in your home to qualify.

  The company might deny you if you have a large amount of debt on the property.

• Equity may be undervalued.

  Many home equity investment companies apply a risk adjustment to the value of your home to protect their investment.

• An appraisal is often required.

  You’ll need to pay for it.

Equity sharing offers numerous benefits, but consider the potential drawbacks, including these agreements’ long-term implications and costs. Younger homeowners, in particular, should consider the potential future appreciation of their property and how sharing that appreciation might affect their financial goals.

Before making this—or any—financial decision, we think it’s crucial to consult a financial professional to understand the terms and assess how an equity-sharing agreement fits into your broader financial plan.

How to choose the best home equity agreement company for you

If you’re comfortable with equity sharing and understand its pros and cons, the next step is finding the right company to work with. We’ve given you several companies to choose from.

Asking yourself these questions can help you narrow down which one is best. 

• Which company can provide me with the necessary funding?
• Does the length of the contract fit my timeline?
• Do I meet the eligibility requirements?
• Can I get an estimate without affecting my credit scores? 
• Does the company have limitations on the use of funds?
• What are my responsibilities as the homeowner during the contract?
• Does the company put a cap on buyback costs?
• Will I pay a prepayment penalty to buy out the agreement early?
• Does the company charge any other fees? If so, will I need to pay them out of pocket?
• Does the company impose any restriction periods that might affect buyout costs?

Considering how soon you can get the funds if approved is also helpful. If time is of the essence, an equity sharing agreement may not be the best option. For example, a personal loan could deliver cash as soon as the same day. The trade-off is that you’re taking on debt you’ll need to make monthly payments on.

Reading reviews or testimonials from past customers can give you a better idea of what people like or don’t like about a particular home equity-sharing company. As part of your research, check the ratings and reviews from previous customers.

Is a home equity sharing agreement right for you?

A home equity sharing agreement isn’t a form of debt, so it can be a decent option for homeowners who need cash but can’t take on new monthly payments or meet the eligibility requirements of a home equity loan or line of credit. 

A lender tries to determine whether you can repay a loan, but an investment company tries to determine the likelihood of your home appreciating. This difference allows homeowners with a low credit score to be eligible for a cash investment. 

A home equity loan may be a better choice if you don’t want to give up a portion of your home’s equity, can afford additional monthly payments, and meet the eligibility requirements set by traditional lenders.

Home equity sharing agreements might make sense for:

• Seniors and retirees. Individuals 65 and older often have substantial home equity and a fixed income post-retirement. Equity-sharing agreements can provide a vital source of funds without the burden of monthly repayments.
• Homeowners in high-value markets. Individuals residing in asset-rich but cash-poor, high-value real estate markets can gain liquidity without selling their homes in a market where buying back similar property might be financially prohibitive.
• Those facing financial hardships. Homeowners experiencing temporary financial hardships such as job loss, unexpected medical expenses, or urgent major home repairs may find equity sharing a feasible alternative to more drastic measures, such as selling their home.

How does an equity sharing agreement compare to traditional home equity financing solutions? 

While home equity sharing agreements offer a unique way to access your home’s equity, traditional home equity financing solutions like home equity loans, home equity lines of credit (HELOCs), and cash-out refinances are still popular. 

Let’s compare these options to equity sharing agreements.

Home equity loans 

A home equity loan is a lump sum you borrow against your equity, which you repay over a fixed term with interest. Unlike an equity sharing agreement, a home equity loan requires monthly payments and typically has stricter credit score and income requirements.

Home equity lines of credit (HELOCs) 

A HELOC is a revolving credit line secured by your home’s equity. You can draw money as needed and only pay interest on what you borrow. Like home equity loans, HELOCs require monthly payments and have credit score and income requirements. Equity sharing agreements don’t have these requirements or monthly payments.

Check out this quick side-by-side comparison.

	Equity sharing agreement	Home equity loan or HELOC
Minimum credit score	Poor credit accepted	Typically fair credit
Income requirement?	None	Yes, varies
Monthly payments?	None	Yes
Interest rates?	None	Yes

Ask the expert

Chloe Moore

CFP®

Home equity sharing agreements are a good option if you’re worried about qualifying for a loan and don’t want to take on debt or monthly payments. If you are financially able to take on debt and cover the monthly payments, a home equity loan or HELOC may be better because you’re not giving up a portion of the future appreciation in your home. Either option is a major financial decision, so I recommend consulting with a financial professional to understand how this affects your personal finances. 

FAQ

Are there monthly payments with an equity sharing agreement?

No, there are no monthly payments or interest charges with home equity share agreements. Instead, you receive cash today for a percentage of your home’s future value. The company gets its share back when you sell the home or buy out the agreement.

How long does it take to receive your funds?

It depends on how quickly your lender can determine the value of your home and get your paperwork finalized. For example, Hometap takes as little as three weeks. (You receive your money within four to seven business days of signing everything.) It may take longer if you opt for an in-person appraisal over a virtual one if you need extra time to gather your paperwork. 

Does my credit score affect the amount of cash I get?

The short answer is yes.

Several factors determine the amount you receive. These factors include your home’s appraised value, housing debt, creditworthiness, and how you use the property.

Remember, most equity-sharing companies have low minimum credit score requirements, so homeowners with poor credit are eligible. Your credit can affect the cash you receive, but you might still be eligible for a large cash investment.

Are there any restrictions on what the funds can be used for?

Not usually. You can use your home equity sharing agreement funds for anything and everything you’d like, whether it’s paying off high-interest debt, funding your kid’s college education, remodeling your home, or getting the income you need to keep supporting your current lifestyle. 

How do home renovations affect the total cost of the agreement?

One of the biggest downsides of home equity agreements is that if your home increases in value quite a bit, it could result in you owing much more than anticipated. If you perform home renovations that boost your property value, you could lose a decent chunk of that appreciation. 

Luckily, some of the best home equity sharing companies (like Hometap) offer renovation adjustments. These adjustments allow you to subtract the estimated value of your renovations from your home value, so you owe less to the company. 

With Hometap specifically, you may qualify for a renovation adjustment if you make qualifying changes of $25,000 or more. You must submit receipts and photos within 90 days of completing the project. If approved, an appraiser will determine the appraised value of your home with and without renovations.

How we selected the best home equity sharing companies

Since 2020, LendEDU has evaluated home equity companies to help readers find the best home equity agreements. Our latest analysis reviewed 208 data points from 8 companies, with 26 data points collected from each. This information is gathered from company websites, online applications, public disclosures, customer reviews, and direct communication with company representatives.

These data points are organized into broader categories, which our editorial team weights and scores based on their relative importance to readers. These star ratings help us determine which companies are best for different situations. We don’t believe two companies can be the best for the same purpose, so we only show each best-for designation once.

Higher star ratings are ultimately awarded to companies that create an excellent experience for homeowners and provide transparent financing solutions. This includes offering online eligibility checks, cost transparency, and unique benefits that support homeowners throughout the term.

Recap of the best home equity sharing companies