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Equity sharing agreements are a way for homeowners to access their home equity without taking on debt or monthly payments. With these agreements, you exchange a portion of your home’s future value to an investment company for an upfront lump sum, cash payment.
Hometap and Noah are two investment companies that offer home equity sharing agreements. If you’re considering selling a portion of your home’s equity, it’s important to weigh your options thoroughly. These companies often vary on eligibility requirements, how much they’re willing to give to a homeowner, and where they operate.
Use this Hometap vs. Noah guide to learn about each company’s requirements and find out which is a better option for your needs.
In this comparison:
- Hometap vs. Noah: At a glance
- Does Hometap or Noah have better reviews and ratings?
- Is a home equity investment from Hometap or Noah more accessible?
- Scenarios in which Hometap or Noah is better than the other
- Which company is our choice between Hometap and Noah?
Hometap vs. Noah: At a glance
Important note: Noah has paused accepting new applications and isn’t taking on any new customers at this time.
|Our score (out of 5)||4.5||4.3|
|Minimum credit score||500||580|
|Investment amount||$30,000 – $600,000||$30,000 to $500,000|
|Term length||10 years||10 years|
Hometap is an equity sharing company based in Boston. It offers investments from $30,000 to $600,000, depending on the amount of equity in the home. To qualify, you’ll need at least a 25% equity stake in your home.
While Hometap encourages homeowners to have credit scores of 600 or above, it also says a credit score of 500 is the bare minimum, so homeowners with low credit scores may still have a chance. The company allows you to buy out its share (or sell the home) at any point in the 10-year period. Depending on the appraisal, the company’s share will be between 13.9% and 16.7% of the home’s value. See our full Hometap review for more details.
Noah, formerly called Patch Homes, is a San Francisco-based home equity sharing company. Its home equity investments are a bit smaller than Hometap’s, going up to $500,000. But homeowners can qualify with much less equity in their properties—only 15% is needed. Noah also requires slightly higher credit scores, with a minimum of 580. Like Hometap, Noah’s buyout timeline is 10 years. Check out our full Noah review for more details on the company.
Does Hometap or Noah have better reviews and ratings?
Looking at customer reviews and ratings can be a great way to gauge the service you’ll get from a home equity sharing company. We looked at popular review sites to compare Noah vs. Hometap:
|Trustpilot||4.9 stars||4.3 stars|
|Better Business Bureau||A||A+|
|LendEDU||4.5 stars||4.3 stars|
It doesn’t get much better than Hometap’s 4.9 stars on Trustpilot—and that’s across more than 1,000 real-life customer reviews. A whopping 97% of past customers say their experience was either “great” or “excellent.” Most say the latter, praising Hometap’s helpful representatives, its clear-cut process, and its efficiency.
While Noah’s rating on Trustpilot is admirable, only 87% tout a “great” or “excellent” experience. Eight percent actually say their experience was “bad” or “poor,” compared to just one percent of Hometap’s customers.
Is a home equity investment from Hometap or Noah more accessible?
Reviews are a great place to start, but you’ll also need to weigh eligibility requirements before deciding which equity sharing company to go with.
Though Hometap and Noah operate in a few of the same markets, they largely differ on qualifying standards. See below for a breakdown of eligibility requirements for Hometap vs. Noah.
|State availability||AZ, CA, FL, MA, MI, MN, NJ, NY, NV, NC, SC, OH, OR, PA, VA, UT, and WA||CA, CO, MA, NJ, NY, OR, UT, VA, WA, and DC|
|Minimum credit score||500||580|
|Maximum loan-to-value ratio||75%||85%|
|Type of home||Single-family homes, condos||Single-family homes, most condos and townhomes, some tenancy in common properties. No co-ops or homes on more than an acre.|
|Home value||None disclosed||$175,000 to $3.5 million|
|Fees||3% to 5% servicing fee||3% or $2,000 (whichever is higher)|
|Minimum equity in home||25%||15%|
|Debt-to-income (DTI) ratio||No minimum||60% or less (if above, you must use your Noah investment to pay off debts first)|
|Prequalify||Cash estimate||Temporarily unavailable|
Noah and Hometap are both only available in a handful of states, so start there and work backwards. If that doesn’t point you toward the most appropriate solution, consider your equity stake, credit score, and DTI to help guide you.
Scenarios in which Hometap or Noah is better than the other
If you still can’t decide between Noah vs. Hometap, we’ve broken out some specific situations in which one company may offer more or better benefits than the other. You can use these when making your decision.
- If you have a low credit score
- If you don’t have much equity
- If you have a high debt-to-income
- If you need a large investment
- If you want great service
- If you want fast funding
If you have a low credit score: Hometap
While both Hometap and Noah allow for sub-600 credit scores, Hometap’s minimums go even lower. The company allows for scores down to 500 compared to Noah’s 580 minimum.
Keep in mind that a low score may impact your terms, no matter which company you choose. You may receive less funding or have to give up a larger equity stake in the future if your score is particularly low.
If you don’t have much equity: Noah
You’ll need some amount of equity to qualify with either company, but Noah’s requirements are lower. Homeowners need just a 15% equity stake in order to qualify for a home equity sharing agreement with Noah. Hometap requires at least 25% equity.
If you have a high debt-to-income ratio: Hometap
If your debt-to-income ratio is less than ideal, Hometap may be a better choice. The company has no set DTI maximum, instead focusing on other factors like your credit score, home value, equity stake, and more.
Noah requires you to have a DTI of 60% or less. Though you may be able to qualify with DTIs higher than this, you’ll have to agree to use the cash you get to pay off debts before anything else.
If you need a large investment: Hometap
Both Noah and Hometap offer pretty hefty investment maximums, but Hometap’s wins out by just a hair. With Noah, you can get up to $500,000 in funding. Hometap goes up to $600,000.
Remember, though: Your investment amount—i.e. how much cash you can get today—is based on how much equity you have. Your home will need to be worth a pretty penny if you want to take out $600,000.
If you want great service: Hometap
If you look at the reviews noted above, it’s clear Hometap customers have been pretty happy with the company’s services. Noah’s reviews are largely positive, too, but nowhere near as glowing as Hometap’s.
So, if you’re on the hunt for the best service and guidance as you tap your equity, Hometap is probably your best bet.
If you want fast funding: Noah
Noah offers slightly faster funding than Hometap. According to Noah, it can close in as few as 15 days, as long as you’re responsive and upload your documentation quickly. Hometap says it averages about three weeks—slightly longer than Noah’s timeline.
Which company is our choice between Hometap and Noah?
When comparing Hometap vs. Noah, our analysis rated Hometap higher. Though both offer similar home equity sharing agreements, Hometap’s is more accessible as it allows for lower credit scores, is available in more markets, and offers more funding. Its only drawback is the higher share of equity you’ll need to qualify.
If you’d like to consider other options, start with our guide to the top home equity sharing companies.
Author: Aly Yale