San Francisco-based equity services provider Unison has launched a new product that combines the traditional features of mortgage financing with emerging equity investment (HEI) options.
Unison calls its new offering an ‘Equity Sharing Home Loan.’ This product represents a ‘hybrid solution between debt and equity,’ the company says. It is initially available in the states of Arizona, Utah and Colorado. A company spokesperson said that by the end of this year, it plans to expand to states that together cover 50% of the U.S. equity market.
This second mortgage offers a below-market interest rate that allows homeowners to tap into their equity without refinancing their existing mortgage. Like other HEI products, Unison allows you to share in the property’s future appreciation. But unlike typical HEIs, it includes qualification and repayment terms comparable to those of a home equity loan or home equity line of credit (HELOC).
“Whether homeowners are looking to renovate their homes, consolidate high-interest debt or secure their financial future, Unison’s Equity Sharing Home Loan offers a versatile and customizable solution to meet their individual needs and goals,” Unison President Ryan Downs said in a statement. “With lower monthly payments made possible by shared property appreciation, homeowners can pursue their financial goals with confidence.”
The product includes a 10-year interest-free repayment period. Eligible borrowers must have a FICO score of 680 or higher and a debt-to-income ratio of 40% or less. The maximum combined loan-to-value ratio of the property cannot exceed 70%. Borrowers with higher credit scores can receive more favorable loan terms, Unison said.
Early repayment of the loan is possible without penalty. This includes repayment of the original loan amount, accrued interest and the agreed-upon capital gains portion. In addition, homeowners who make improvements to their property can claim a credit for the added value after three years to reduce the shared capital gains portion of the loan.
Unison has plans to securitize these loans in the secondary market, the company spokesperson said. In June, the company completed a $215 million securitization backed by equity investments. The transaction was rated by DBRS Morningstar.
According to ICE Mortgage Technology’s Q2 2024 report, U.S. homeowners have $11.5 trillion in collective equity that can be leveraged while maintaining a 20% equity buffer.
Equity investing is gaining traction as homeowners look for new ways to leverage their equity without taking on additional debt. Companies like Point, Hometap, Unlock and Aspire offer HEIs to consumers, facilitated by demand from investors in the secondary market. HEI providers estimate the market is worth $2 billion to $3 billion per year.
How does Unison’s Equity Sharing Home Loan differ from traditional mortgage financing?
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Revolutionizing Home Financing: Unison Launches Innovative Equity Sharing Home Loan
San Francisco-based equity services provider Unison has recently introduced a groundbreaking product that combines the traditional benefits of mortgage financing with emerging equity investment options. Dubbed the “Equity Sharing Home Loan,” this innovative offering is poised to transform the home financing landscape by providing homeowners with a hybrid solution that bridges the gap between debt and equity.
A Hybrid Solution for Homeowners
Unison’s Equity Sharing Home Loan is designed to offer homeowners a flexible and customizable solution to tap into their home’s equity without refinancing their existing mortgage. This second mortgage provides a below-market interest rate, allowing homeowners to access their equity while sharing in the property’s future appreciation. Unlike typical Home Equity Investments (HEIs), the Equity Sharing Home Loan includes qualification and repayment terms similar to those of a home equity loan or home equity line of credit (HELOC).
Competitive Features and Benefits
The Equity Sharing Home Loan boasts a range of competitive features and benefits, including:
A 10-year interest-free repayment period
Eligibility for borrowers with a FICO score of 680 or higher and a debt-to-income ratio of 40% or less
A maximum combined loan-to-value ratio of 70%
Favorable loan terms for borrowers with higher credit scores
Early repayment of the loan without penalty
Repayment of the original loan amount, accrued interest, and the agreed-upon capital gains portion
* A credit for property improvements made after three years to reduce the shared capital gains portion of the loan
Expanding Access to Home Equity
Unison’s Equity Sharing Home Loan is initially available in Arizona, Utah, and Colorado, with plans to expand to states covering 50% of the U.S. equity market by the end of the year. This rollout is set to provide millions of homeowners with access to a innovative financing option that can help them achieve their financial goals.
Unison’s Vision for Home Financing
“We’re thrilled to introduce the Equity Sharing Home Loan, a game-changing product that empowers homeowners to tap into their equity and pursue their financial goals with confidence,” said Unison President Ryan Downs. “Whether homeowners are looking to renovate their homes, consolidate high-interest debt, or secure their financial future, our solution offers a versatile and customizable approach to meet their individual needs.”
Securitization Plans
Unison has announced plans to securitize these loans in the secondary market, further demonstrating the company’s commitment to providing access to innovative home financing solutions. In June, Unison completed a $40 million Series C funding round, underscoring the company’s growth potential and ability to drive innovation in the home financing industry.
Conclusion
Unison’s Equity Sharing Home Loan represents a significant breakthrough in home financing, offering homeowners a hybrid solution that combines the benefits of traditional mortgage financing with emerging equity investment options. With its competitive features, flexible repayment terms, and plans for expansion, this innovative product is poised to transform the way homeowners access their equity and achieve their financial goals.
Keyword Tags: Unison, Equity Sharing Home Loan, Home Financing, Mortgage Financing, Home Equity Investments, HEI, Second Mortgage, Below-Market Interest Rate, Home Equity Loan, HELOC, Home Renovation, Debt Consolidation, Financial Goals, Securitization, Secondary Market, Home Equity, Financial Innovation.
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Revolutionizing Home Financing: Unison Launches Innovative Equity Sharing Home Loan
San Francisco-based equity services provider Unison has introduced a groundbreaking product that combines the traditional benefits of mortgage financing with emerging equity investment options. Dubbed the “Equity Sharing Home Loan,” this innovative offering is poised to transform the home financing landscape by providing homeowners with a hybrid solution that bridges the gap between debt and equity.
A Hybrid Solution for Homeowners
Unison’s Equity Sharing Home Loan is designed to offer homeowners a flexible and customizable solution to tap into their home’s equity without refinancing their existing mortgage. This second mortgage provides a below-market interest rate, allowing homeowners to access their equity while sharing in the property’s future appreciation. Unlike typical Home Equity Investments (HEIs), the Equity Sharing Home Loan includes qualification and repayment terms similar to those of a home equity loan or home equity line of credit (HELOC).
Competitive Features and Benefits
The Equity Sharing Home Loan boasts a range of competitive features and benefits, including:
A 10-year interest-free repayment period
Eligibility for borrowers with a FICO score of 680 or higher and a debt-to-income ratio of 40% or less
* A maximum combined loan-to-value ratio of
