Banks underwrite your tax return. Home equity investment companies underwrite the house, which is why the product exists for owners who have equity and thin documented income.
I started looking at home equity investment companies after seeing the same profile over and over. Owners with real equity in a house, and income a bank will not underwrite while the business is still growing.
Mortgage holders now sit on a record $18 trillion in equity, with $11.7 trillion described as tappable. The home equity contract market behind that pile is still tiny. The CFPB put 2024 volume at $2 billion to $3 billion.
That gap is the story. Traditional HELOCs ask for income, DTI, and a new monthly payment. An HEI asks for equity and a claim on the house later. For a growing owner, that trade can be useful. It can also be the most expensive check you ever write if the house runs hot.
What a home equity investment is
A home equity investment is a lump-sum cash payment today in exchange for a share of your home’s future value, with no contractual interest and no required monthly payment.
You keep title. You keep paying the first mortgage, taxes, and insurance. The company records a lien. You settle when you sell, refinance, or hit the contract term, usually 10 or 30 years.
Marketing loves the phrase “not a loan.” Read the settlement formula anyway. You still owe a lump sum later, and that lump sum is the price of the product.
The CFPB’s 2025 market overview is the cleanest official explainer. Processing fees often run 3.90 to 4.99 percent of the advance. Starting values can be marked down. Multipliers can apply to the whole house, or only to the gain. Some contracts add a rate cap that behaves like a maximum APR.
Why owners with equity and thin income even look at this
Most HELOC lenders still want documented income and a debt-to-income ratio near 43 percent, with some files stretching toward 50 percent when credit and equity are strong.
Self-employed returns do not always show the cash the business produced. K-1 losses, owner add-backs, and a working-capital line all land in the same DTI stack. The credit union can like the house and still decline the file.
An HEI skips that test. Approval rests on equity, occupancy, property type, and a credit floor that can sit in the 500s. That is the fit for the owner who needs inventory money and cannot add an $800 payment this year. It is also why you should price it against a real business loan APR, not against the brochure line that says, “zero interest.”
If a vanilla HELOC approves at a number you can service, take the HELOC. This product is for the file the bank already rejected, or for the owner who refuses to blow up a cheap first mortgage with a cash-out refi.
The number that changes the decision
In the CFPB’s worked example, a $50,000 home equity contract repaid between $94,074 and $215,892 over 10 years, while a 9 percent interest-only HELOC on the same $50,000 cost $95,000 all-in.
That range comes from the Bureau’s January 2025 issue spotlight. The HEI beat the HELOC only if the house fell at least 5 percent. In the strong-appreciation case, the homeowner repaid more than twice the HELOC total.
That is the part most landing pages bury. No monthly payment is a cash-flow feature. It is not a cost feature. The cost hides in the settlement math, the starting-value haircut, and the multiplier.
I would treat any quote that cannot reproduce a table like this as incomplete. If they will not show you the formula in a spreadsheet, you do not have a price. You have a vibe.
10-year outcome on $50,000 | House -5% | House flat | Modest gain | Hot market |
CFPB HEI example, total repaid | $94,074 | Higher than HELOC | Higher than HELOC | Up to $215,892 |
9% IO HELOC, total paid | $95,000 | $95,000 | $95,000 | $95,000 |
Who wins on cost | HEI, barely | HELOC | HELOC | HELOC, by a lot |
Source: CFPB Issue Spotlight, January 2025. HELOC assumes $50,000 drawn at 9 percent, interest-only for 10 years ($45,000 interest plus $50,000 principal). HEI range is the Bureau’s modeled settlement on the same $50,000 advance. Live contracts use different multipliers, caps, and risk adjustments.
Scale that same logic to the check an owner wants. The table after this section runs a plain 20 percent share of ending value on a $400,000 house and a $100,000 advance. It is not any company’s quote. It is the shape of the trade.
Annual appreciation, 10 years | Ending home value | 20% share due | Vs. $90k HELOC interest |
3% | $537,600 | $107,500 | Cheaper than 9% IO |
5% | $651,600 | $130,300 | Still under $190k all-in HELOC |
8% | $863,600 | $172,700 | Closes the gap; caps decide it |
Illustrative only. Starts at $400,000. Investor takes 20 percent of ending value, no risk adjustment and no cap. A 9 percent interest-only HELOC on $100,000 costs $90,000 of interest over 10 years and still owes the $100,000. Add origination fees to both sides before you pick a winner.
HEI vs. HELOC: What Will You Owe at Settlement?
Enter your numbers. The calculator models the investor's payoff under a home equity investment against total interest and principal on an interest-only HELOC held for the same period.
| Home value today ($) | |
| Cash needed ($) | |
| Investor share of ending home value (%) | |
| Annual cap rate on HEI payoff (%, 0 = no cap) | |
| Expected annual appreciation (%) | |
| Years until you settle | |
| HELOC interest rate (%, interest-only) |
|
Projected home value at settlement $537,567 |
|
HEI: total due at settlement $107,513 Cost above the $100,000 advance: $7,513 (about 0.7% per year) |
|
HELOC: interest paid plus principal due $190,000 $90,000 in interest over 10 years, plus the $100,000 principal still owed |
| The HEI costs less here: $7,513 in cost of capital vs. $90,000 in HELOC interest. But the HEI's cost rises with every point of appreciation, and the HELOC's does not. |
Simplified model. Assumes an interest-only HELOC with principal due at settlement, no draw-period changes, and no HEI risk adjustment to your starting home value. Actual HEI contracts often discount the appraised value 10 to 20% before applying the share. Not financial advice.
How the five main companies differ
Hometap, Point, Unlock, Unison, and Splitero still dominate a small market, and the differences that matter are term length, credit floor, fee, and whether you can buy the position down before maturity.
The CFPB named Unison, Point, Hometap, and Unlock as the four largest originators as of its 2025 review. Splitero is the consistent fifth in 2026 comparison roundups. Terms move. Confirm the live contract.
Company | Max cash | Term | Min FICO | Stated fee | Verdict for an owner |
Hometap | Up to $600,000 | 10 years | 585 | 4.5%, cap $20k | Biggest check. Short clock. Use if you can exit by the mid-2030s. |
Point | Up to $600,000 | 30 years | 500+ | About 3.9% | Long runway. Watch the starting-value haircut. Some 2 to 4 unit and investment property files. |
Unlock | Up to $500,000 | 10 years | 500+ | About 4.9% | Partial buyouts during the term. Best if you can nibble the position down as cash flow improves. |
Unison | $30k to $500k, up to 15% | 30 years | About 620 | About 3.9% plus 5% risk adj. | Shares depreciation as well as gains. Larger cut of appreciation. Active 2026 litigation. Read twice. |
Splitero | Up to $500,000 | Up to 30 years | 500+ | 4.99% | Low credit floor and a safety-cap story. Confirm state map before you spend an afternoon in the portal. |
Hometap figures verified against company FAQs and pricing pages as of August 2026: $15,000 to $600,000, 585 FICO, 4.5 percent fee capped at $20,000, 10-year term, 18.5 percent cap compounded monthly. Other rows compiled from company disclosures and August 2026 comparison reviews. State availability changes. Pull a live estimate.
Hometap is the one with the cleanest published grid. Its FAQ lists a 585 FICO floor, a 4.5 percent fee capped at $20,000, and a $600,000 ceiling. Its pricing page now pairs a share of future value with an 18.5 percent annual cap, compounded monthly.
Credit still matters, even without a DTI test. A 500 floor is not a 740 file. If you want the ranges lenders actually use on ordinary products, FICO score ranges in 2026 is the companion read.
Unison’s legal overhang
Unison is facing multiple 2025 and 2026 cases that treat its equity-sharing agreement as a high-cost mortgage rather than a true investment.
The National Consumer Law Center announced a Massachusetts class action in August 2026 (Cuvellier v. Unison). The complaint alleges the product was sold as an interest-free option while functioning as credit. Other Unison matters are pending in California and elsewhere. That is not a reason to ignore the whole category. It is a reason not to pick Unison on brand recognition alone.
What the contract costs besides the share
On top of the appreciation share, expect a 3.9 to 4.99 percent origination fee, a starting-value haircut, occupancy covenants, and a lump-sum settlement that can force a sale if you cannot refinance.
The fee comes out of proceeds or gets treated as part of the invested amount. Either way, $100,000 advertised is not $100,000 in the operating account.
Covenants are the unglamorous part. Stay insured. Pay taxes. Do not vanish from the house for months. Unison has restricted long absences. Break a covenant and you can trigger settlement early.
The CFPB reviewed 38 complaints and found a pattern: surprise at the payoff, fights over appraisals, trouble refinancing the first lien, and owners who felt the only clean exit was a sale. The January 2025 consumer advisory put the same warning in plain English. Costly, risky, complex. Not a vibe. A label.
Term length is the other price
A 10-year Hometap or Unlock contract creates a forced settlement in the mid-2030s, while a 30-year Point, Unison, or Splitero contract gives the business time to become bankable before anyone has to write the check.
That is the owner-specific variable most comparison sites skip. If you are in year two of a growth cycle, 10 years can be plenty. If you are still feeding the company, 10 years is a cliff with a date on it.
Columbus-style markets make the math more defensible than coastal melt-ups. Moderate appreciation means you are less likely to hand the investor a windfall. You are also less likely to ride a wave that would have paid a HELOC off with home-price gains alone.
Put differently, this is debt versus equity financing with your house as the cap table. The investor does not take board seats. They take a slice of the roof.
Regulators have already picked a side of the argument
The CFPB’s January 2025 package treated home equity contracts as a consumer-finance product worth mortgage-style scrutiny, and state cases plus a 2026 Senate bill have followed that path.
On the same day as the spotlight, the Bureau filed an amicus brief in Roberts v. Unlock arguing the product at issue was residential mortgage credit under TILA. Colorado later settled with Unlock on the theory that the agreements are consumer credit. Senator Merkley’s Home Equity Lending Integrity Act, introduced June 2026, would fold HEIs into TILA’s mortgage definition.
None of that means the product vanishes next quarter. It does mean pricing, disclosures, and state maps can move while you are inside a 10-year contract. Build a margin into the settlement number you can live with.
When this is a fit, and when it is not
Use a home equity investment when a HELOC or cash-out refi is unavailable or too small, the cash has a specific job in the business, and you can name the settlement path in writing.
Skip it when you already qualify for a cheap second lien you can actually pay, or when the quote only works if your house barely appreciates in a market that has historically done better than that.
If you already run the company
Pull same day estimates from Hometap, Point, and Unlock. Add Splitero if your score sits in the 500s. Ask for cash-to-you after fees, starting agreed value after any haircut, the investor percentage, and modeled payoffs at 3, 5, and 8 percent appreciation.
Park those numbers next to a credit-union HELOC term sheet at the DTI they will actually approve. Then decide whether the payment-free years are worth the settlement.
If you are still stacking other capital
An HEI is one tool, not the whole stack. Friends and family funding, creative startup funding paths, and even a fast alternative lender like the profile in how Fora Financial works may be cheaper than selling a slice of a house that is still compounding.
Seller financing on an acquisition is a different conversation. That lives in seller financing in 2026, not in this contract.
What to do this week
Get three written HEI quotes and one HELOC quote on the same home value, then compare settlement cost at 3, 5, and 8 percent appreciation against the monthly payment you would have to carry.
Estimates usually start with a soft pull. Do them the same day so the appraisal story cannot drift. If a company will not show the formula, that is the answer.
This product is real. The market is still small. For the owner who has equity in the house and a hole in documented income, it can be the only door that opens.
Price the door before you walk through it. The house can fund the company. Do not let the company forget it has to fund the house back.