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Home Equity Home Equity Investments

Best Home Equity Sharing Companies to Invest in Your Home

Updated Jun 02, 2023   |   22 mins read

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

Since it’s not a form of debt, the eligibility requirements are more lenient than with a traditional lender, making this an option for homeowners that are self-employed, have poor credit, or can’t afford additional monthly payments.

This guide will explain how a home equity sharing agreement works, which companies are the best, the benefits and downsides of accepting a home equity investment, and more.

Best home equity sharing companies

We identified five companies as our picks for the best home equity sharing companies. These include:

  • Best overall: Unison
  • Best for buy-out flexibility: Unlock
  • Best for poor credit: Hometap
  • Best homeowner protection program: Noah (temporarily paused)
  • Best for long terms with poor credit: Point

If you want to tap into your home’s equity without taking on debt, a home equity sharing agreement, also known as a home equity investment, is a solid option. A home equity shared agreement is an exchange between you and an investment company where you receive a lump sum cash payment in exchange for a portion of your existing equity.

Since it’s not a form of debt, the eligibility requirements are more lenient than with a traditional lender, making this an option for homeowners that are self-employed, have poor credit, or can’t afford additional monthly payments.

This guide will explain how a home equity sharing agreement works, which companies are the best, the benefits and downsides of accepting a home equity investment, and more.

In this guide:

Top choices for home equity sharing

Best overall: Unison

  • Editorial Rating: 4.7/5
  • Investments from $30,000 to $500,000
  • Get a cash estimate in just 60 seconds with no impact on your credit
  • Must have a credit score of 620 or above

Founded in 2004, Unison is a team of financial and real estate professionals committed to helping equity-rich homeowners finance their life needs without adding debt. Unison is our pick as the best overall because it is available in more states than any of its competitors, shares in the loss if your home depreciates, and has a quick online form where you can get a cash estimate without impacting your credit.

What you need to know

  • Only available in 29 states. Unison is currently available in Arizona, California, Colorado, Delaware, Florida, Illinois, Indiana, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Virginia, Washington, Wisconsin, and Washington, D.C.
  • No monthly payments. Since Unison is investing in your home, there’s no debt to repay.
  • Funds can be used for anything. There are no restrictions on how you use the cash you receive.
  • 30-year term. The investment contract has a term of 30 years. You can buy out Unison’s share of equity at any point during the 30-year term. If you don’t buy out Unison before the term ends, you’ll need to sell your home so that Unison can collect its share.
  • Restriction periods. There is a three-year restriction on remodeling adjustments which allow you to benefit from the full value of home improvement projects.
  • Shares in the future appreciation and depreciation. Unison will make money if your home appreciates during the term. If your home depreciates, Unison will share in that loss. However, Unison won’t share in any losses if you choose to buy out the agreement.
  • More inclusive eligibility requirements. There are no income requirements, and fair credit is accepted.
  • Quick online form. Fill out an easy online form in just 60 seconds to check your eligibility and get a cash estimate.

Pros

  • No monthly payments
  • Large investments are available
  • Funds can be used for anything
  • No income requirements
  • Fair credit is accepted
  • Prequalify through an online form without impacting your credit score

Cons

  • If failure to maintain your property leads to loss of value in your home, Unison won’t share in this loss
  • A restriction period limiting when you can make home improvements
  • Currently only available in 29 states
  • Unison receives a larger percentage of equity than the cash value you receive
  • If you don’t buy out Unison’s position before the end of the term, you’ll need to sell your home

How to get started

If your home is in one of the states listed above, you have a credit score above 620, and a loan-to-value ratio below 70%, you should be eligible for an investment from Unison.

According to its website, you can unlock your equity in four simple steps. First, you’ll need to get pre-approved in seconds through its online form. Second, once you’re pre-approved, you’ll be asked to complete a formal application.

Third, when your application is approved, you’ll work with Unison to schedule a home appraisal to determine the final numbers of the investment. Lastly, if you’re happy with the final terms, you’ll sign the offer letter and receive your funds in as few as three days.

Ready to get a cash estimate in seconds with no impact on your credit score? Click here.


Best for buy-out flexibility: Unlock

  • Editorial Rating: 4.5/5
  • Investments from $30,000 to $500,000
  • Only company allowing partial buy out payments
  • Doesn’t share in the value added from home improvements

Founded in 2020, Unlock is comprised of a team of experienced home equity investment professionals who strive to help homeowners utilize the equity in their homes to get the cash they need. Unlock is our choice as the best for buy-out flexibility because it’s the only company in the industry that allows you to make partial payments during the life of the term.

What you need to know

  • Only available in 15 states. Unlock is currently available in Arizona, California, Colorado, Florida, Michigan, Minnesota, Nevada, New Jersey, North Carolina, Oregon, South Carolina, Utah, Tennessee, Virginia, and Washington.
  • No monthly payments. Since Unlock is investing in your home, there’s no debt to repay.
  • Funds can be used for anything. There are no restrictions on how you use the cash you receive.
  • 10-year term. The investment contract has a term of 10 years. You can buy out Unlock’s share of equity at any point during the 10-year term. If you don’t buy out Unlock before the term ends, you’ll need to sell your home so that Unlock can collect its share.
  • Partial buy-out payments accepted. Unlock is the only home equity investment company that allows you to buy out its position with partial payments.
  • Shares in the future appreciation and depreciation. Unlock will make money if your home appreciates during the term. If your home depreciates, Unlock will share in that loss.
  • More inclusive eligibility requirements. There are no income requirements, poor credit is accepted, and both owner and non-owner-occupied residences are eligible.
  • Quick online form. Fill out an easy online form in just 60 seconds to check your eligibility and get a cash estimate.

Pros

  • No monthly payments
  • Large investments available
  • Funds can be used for anything
  • The only company that allows partial buy out payments
  • Doesn’t share in any value created from home improvements made at your expense
  • No income requirements
  • Poor credit is accepted
  • Prequalify through an online form without impacting your credit score

Cons

  • Currently only available in 15 states
  • Receives a larger percentage of equity than the cash value you receive
  • If you don’t buy out Unlock’s position before the end of the term, you’ll need to sell your home

How to get started

If your home is in one of the states listed above, you have a credit score above 550, and a loan-to-value ratio below 75%, you should be eligible for an investment from Unlock.

According to its website, you can get an initial cash estimate in just 60 seconds by filling out 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.

Ready to get a cash estimate in just 60 seconds with no impact on your credit score? Click here.


Best for poor credit: Hometap

  • Editorial Rating: 4.5/5
  • Investments from $15,000 to $600,000
  • Highest customer reviews of all companies listed
  • No out-of-pocket costs

Founded in 2017, Hometap wants to make homeownership less stressful and more accessible. Hometap is our choice as the best for poor credit because of its ability to provide a financing solution to homeowners with credit scores as low as 500.

What you need to know

  • Only available in 17 states. Hometap is currently available in Arizona, California, Florida, Massachusetts, Michigan, Minnesota, New Jersey, New York, Nevada, North Carolina, South Carolina, Ohio, Oregon, Pennsylvania, Virginia, Utah, and Washington.
  • Excellent customer reviews. Hometap has an excellent rating of 4.9 out of 5 on Trustpilot and a BBB rating of an A+ as of January 20, 2022.
  • No monthly payments. Since Hometap is investing in your home, there’s no debt to repay.
  • Funds can be used for anything. There are no restrictions on how you use the cash you receive.
  • Widest investment range. Hometap offers the smallest investment amount ($15,000), as well as the largest ($600,000).
  • 10-year term. The investment contract has a term of 10 years. You can buy out Hometap’s share of equity at any point during the 10-year term. If you don’t buy out Hometap before the term ends, you’ll need to sell your home so that Hometap can collect its share.
  • Shares in the future appreciation and depreciation. Hometap will make money if your home appreciates during the term. If your home depreciates, Hometap will share in that loss.
  • More inclusive eligibility requirements. There are no income requirements, poor credit is accepted, and both single-family homes and condos are eligible.
  • Quick online form. Fill out an easy online form in just a few clicks to check your eligibility and get a cash estimate.

Pros

  • No monthly payments
  • Small and large investments are possible
  • Funds can be used for anything
  • No out-of-pocket costs
  • Talk with an investment manager
  • Poor credit accepted
  • No income requirements
  • Prequalify through an online form without impacting your credit score

Cons

  • Currently only available in 17 states
  • Receives a larger percentage of equity than the cash value you receive
  • If you don’t buy out Hometap’s position before the end of the term, you’ll need to sell your home

How to get started

If your home is in one of the states listed above, you have a credit score above 500, and a loan-to-value ratio below 75%, you should be eligible for an investment from Hometap.

According to its website, there are four steps to take to get you the cash you need. First, you’ll need to fill out a quick online form that will prequalify you and provide an estimate of how much money you can receive.

Second, a dedicated Investment Manager will be assigned to your account and answer any questions you may have. Third, if you agree to the terms in the estimate, a home appraisal will be scheduled to determine the final terms of the agreement. Lastly, you’ll sign the final offer and receive your funds within a few days of closing.

Ready to get a cash estimate in just 60 seconds with no impact on your credit score? Click here.


Best homeowner protection program: Noah

Important note: Noah has paused accepting new applications. The CEO has said that the company plans to restart applications at a later date, but no date has been given.

  • Editorial Rating: 4.3/5
  • Investments from $30,000 to $500,000
  • Offers a Homeowner Protection Program
  • No out-of-pocket costs

Founded in 2016, Noah, formerly known as Patch Homes, was created when its CEO witnessed the struggles of family and friends trying to utilize equity in their homes. Noah is one of our top picks because of its Financial Protection Program. This program provides financial assistance to homeowners struggling to make mortgage payments or afford necessary home repairs.

What you need to know

  • Only available in 9 states. Noah is currently available in California, Colorado, Massachusetts, New Jersey, New York, Oregon, Utah, Virginia, Washington, and Washington, D.C.
  • Home Protection Program. If you fall into financial difficulty, Noah will provide financial assistance to help you keep up with house payments or make emergency home repairs.
  • No monthly payments. Since Noah is investing in your home, there’s no debt to repay.
  • Funds can be used for anything. There are no restrictions on how you use the cash you receive.
  • 10-year term. The investment contract has a term of 10 years. You can buy out Noah’s share of equity at any point during the 10-year term. If you don’t buy out Noah before the term ends, you’ll need to sell your home so that Noah can collect its share.
  • Shares in the future appreciation and depreciation. Noah will make money if your home appreciates during the term. If your home depreciates, Noah will share in that loss.
  • More inclusive eligibility requirements. There are no income requirements, poor credit is accepted, and single-family residential units, condos, and townhouses are eligible.
  • Quick online form. Fill out an easy online form in just a few clicks to see if your home qualifies.

Pros

  • No monthly payments
  • Large investments available
  • Funds can be used for anything
  • Home Protection Program
  • No out-of-pocket costs
  • Talk with a Home Advisor
  • No income requirements
  • Poor credit accepted
  • Prequalify through an online form without impacting your credit score

Cons

  • Currently only available in nine states, plus D.C.
  • Receives a larger percentage of equity than the cash value you receive
  • If you don’t buy out Noah’s position before the end of the term, you’ll need to sell your home

How to get started

If your home is in one of the states listed above, you have a credit score above 580, and a loan-to-value ratio below 85%, you should be eligible for an investment from Noah.

According to its website, the financing process can be completed in four steps. You can get instant pre-approval in just a few clicks and find out how much funding you can receive. If the estimate you receive meets your needs, you can submit an application for Noah to review.

Once your application is reviewed, a home appraisal will be scheduled to finalize the terms of the investment. If you agree to the final terms, your funds will be transferred to you within a few days.


Best for long terms with poor credit: Point

  • Editorial Rating: 4.3/5
  • Investments from $25,000 to $350,000
  • Promotional pricing when funds are used for eligible home improvements
  • No prepayment penalty

Founded in 2015, Point was built after its team members experienced firsthand the frustrations of homeownership and debt financing. Point is our pick as the best for long terms with poor credit because it is the only company that offers a term length of 30 years for homeowners with a credit score as low as 500.

What you need to know

  • Only available in 18 states. Point is currently available in Arizona, California, Colorado, Florida, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Virginia, Washington, and Washington, D.C.
  • Promotional pricing for home improvements. If you plan to use your funds for home improvements, you may be eligible for promotional pricing.
  • No monthly payments. Since Point is investing in your home, there’s no debt to repay.
  • Funds can be used for anything. There are no restrictions on how you use the cash you receive.
  • 30-year term. The investment contract has a term of 30 years. You can buy out Point’s share of equity at any point during the 30-year term. If you don’t buy out Point before the term ends, you’ll need to sell your home so that Point can collect its share.
  • Shares in the future appreciation and depreciation. Point will make money if your home appreciates during the term. If your home depreciates, Point will share in that loss.
  • More inclusive eligibility requirements. There are no income requirements and bad credit is accepted.
  • Quick online form. Fill out an easy online form in just 60 seconds to check your eligibility and get a cash estimate. Point’s online form includes helpful information that explains what everything means along the way.

Pros

  • No monthly payments
  • Funds can be used for anything
  • Promotional pricing when the cash you receive is used for eligible home improvements
  • No income requirements
  • Poor credit is accepted
  • Prequalify through an online form without impacting your credit score

Cons

  • Currently only available in 18 states, plus D.C.
  • Receives a larger percentage of equity than the cash value you receive
  • If you don’t buy out Point’s position before the end of the term, you’ll need to sell your home

How to get started

If your home is in one of the states listed above, you have a credit score above 500, and a loan-to-value ratio below 80%, you should be eligible for an investment from Point.

According to its website, the application process can be completed in five steps. First, you’ll need to fill out a prequalification tool to get a cash estimate. If you’re eligible, Point will have you schedule time to speak with a home equity expert who can answer any questions you may have.

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.

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

Ready to get a cash estimate through an informative online tool? Click here.


How we chose the best home equity sharing companies

We reviewed seven home equity investment companies to determine what each was the best for and how they compared to each other. Our evaluation focused on seven categories, including:

  • Eligibility: Factors included financial requirements, home requirements, and state availability.
  • Investment amount: How much a company was willing to invest in a home.
  • Fees: Factors included origination fees, prepayment penalties, and third-party expenses.
  • Buy-out cost: Factors included the risk-adjustment percentage, annual cost cap, and the repayment model used.
  • Application process: Factors included whether a prequalification form was offered, the simplicity of each company’s online prequalification form, and whether homeowners could talk to a representative.
  • Buy-out options: Factors included buy-out flexibility and term length.
  • Benefits: Factors included unique benefits, such as home improvement discounts, partial buy-out flexibility, and more.
  • Customer reviews: Factors included Trustpilot and BBB ratings.

How does a shared equity agreement work?

A shared equity agreement allows you, the homeowner, to receive a lump sum payment that can be used however you’d like, without taking on debt or monthly payments. In return, the investing company gets a percentage of the future value of your home.

While there are no monthly payments, you are required to buy out the investing company’s share of equity before the end of the term (typically 10 or 30 years).

There are two common repayment models: 1) you pay back the initial amount borrowed plus a pre-determined percentage of any appreciation, or 2) you pay back a pre-determined percentage of the new appraised value of the home.

An important note: If your home depreciates in value, the investing company will share in that loss and the amount you owe will be less than the amount you’d owe had the home maintained the same value throughout the term.

To demonstrate how repayment works, we’ve used Unison’s repayment model to see how much a homeowner who received $25,000 in exchange for 20% of their equity would owe at the end of their term.

Appreciated HomeDepreciated 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 shared20%20%
Principal funding amount$25,000$25,000
Amount you owe$45,000$5,000

*Most companies add a valuation adjustment to the appraisal of your home for risk purposes. The amount your home appreciated or depreciated is based upon the adjusted home value.

Benefits and downsides of a shared equity agreement

Benefits

  • You don’t have to make monthly payments. The cash you receive is provided in exchange for equity in your home, so you do not have to pay interest or repay the principal amount each month.
  • 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.
  • Poor credit is accepted. Since home equity share agreements aren’t loans but are instead investments in your property, homeowners with poor credit are eligible.
  • No income requirements. Home equity sharing companies aren’t reviewing your ability to follow a repayment schedule, so a steady income is not required.

Downsides

  • You could miss out on growth if home prices go up significantly in your area. You won’t fully benefit if your home appreciates because the investment company owns some of the equity.
  • You could end up paying more than with a traditional home equity loan. This is likely to happen if property values rise.
  • You need sufficient equity in your home. You usually can’t enter into an equity sharing agreement if you have a large amount of existing debt on your home.
  • Your equity may be undervalued. Some lenders make a risk adjustment to the value of your home to protect their investment. This means you may not get the full value of your home’s equity.
  • You’ll have to pay appraisal fees. Typically, the investing company will require you to get the fair market value of your home estimated by a licensed appraiser before they offer a final investment amount.

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 in exchange for a percentage of your home’s future value.

Does my credit score impact the amount of cash I receive?

The short answer, yes.

The amount of cash you receive is determined by several factors. These factors include your home’s current appraised value, any pre-existing housing debt, your creditworthiness, and how you use the property.

Remember, though, most equity sharing companies have low minimum credit score requirements, so homeowners with poor credit are eligible. So, while your credit can impact the amount of cash you receive, that doesn’t mean you won’t still be able to receive a large cash investment.

What’s the difference between a home equity investment and a home equity loan or line of credit?

To start, let’s define each of these financial tools:

  • Home equity investment: An exchange of a lump sum of cash for a share of equity in your home. Read more: What is a home equity investment?
  • Home equity loan: A lump sum payment secured by your home. You’ll repay this money over a fixed term, with interest. Read more: Best home equity loans
  • Home equity line of credit: A revolving line of credit allowing you to draw funds from an account as needed. Any funds you draw will need to be repaid by the end of the term. The funds you withdraw are secured by your home. Read more: Best home equity lines of credit

Now that we’ve defined each tool, let’s take a look at a side-by-side comparison to see how each differs from the other.

Home equity investmentHome equity loanHELOC
Minimum credit scorePoor credit acceptedTypically fair creditTypically fair credit
Income requirementNoneYes, variesYes, varies
Monthly paymentsNoneYesYes
Interest ratesNoneYesYes

>> Read More: Alternatives to home equity loans and HELOCs

Is a home equity sharing agreement right for me?

Since a home equity sharing agreement isn’t a form of debt, it can be a good 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 home equity line of credit.

While a lender is trying to determine if you can repay a loan, an investment company is trying to determine the likelihood of your home appreciating in the future. This difference allows homeowners with a low credit score, as low as 500, to be eligible for a cash investment.

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

Recap of the best home equity sharing companies

CompanyOur ratingInvestmentMinimum credit score
Unison4.7$30,000 – $500,000620
Hometap4.5$15,000 – $600,000500
Unlock4.5$30,000 – $500,000550
Noah4.3$30,000 – $500,000580
Point4.3$25,000 – $350,000500