A home equity investment (HEI) is a way to access the cash value of your home’s equity without adding monthly payments to your budget. Instead of borrowing against your equity, you sell a share of your home’s future value to an investment company in exchange for a lump sum now.
It’s a newer product category that works very differently from a HELOC or home equity loan, and it may work well for homeowners who are equity-rich but can’t or don’t want to take on traditional financing.
Key Takeaways
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What Is a Home Equity Investment?
A home equity investment is an agreement in which a homeowner sells a percentage of their home’s future value to a company in exchange for cash today. Unlike a loan, there’s no interest rate and no monthly payment.
You receive a lump sum upfront, and repayment happens later, when you sell the home, refinance, or reach the end of the agreement term. You may also see this product referred to as a shared appreciation agreement or shared equity agreement. All three terms describe the same strategy.
How Does a Home Equity Investment Work?
- Application: The company reviews your home’s value, equity position, and basic eligibility. There is typically no requirement to prove your income.
- Appraisal: The company determines your home’s current market value using an independent appraisal or automated valuation model.
- Offer: The company proposes a lump sum, which is typically a percentage of your home’s appraised value, in exchange for a defined share (percentage) of its future value.
- Funding: After closing, funds are typically disbursed within 45 days.
- Settlement: When you sell, refinance, or reach the end of your term, you repay the original investment amount plus or minus the company’s share of any change in your home’s value, measured from the appreciation starting value.
Example: Your home is worth $400,000. You receive $80,000 (20% of its value) from an HEI company. The company sets an appreciation starting value of $292,000, which is lower than your appraised value to account for risk. Five years later, you sell for $500,000. Because appreciation is measured from $292,000, the company calculates a gain of $208,000 rather than $100,000, and its 20% share comes to $41,600, for a total repayment of $121,600.
If instead your home sold for $280,000, which is below the appreciation starting value of $292,000, the company would share in that loss, receiving less than its original $80,000 back.
Note: Some HEI companies cap their depreciation losses.
How Is a Home Equity Investment Different From a HELOC or Home Equity Loan?
With traditional home equity products, you borrow money and repay it with interest, typically in monthly installments. With an HEI, there is no interest rate, no monthly bill, and no impact on your debt-to-income ratio.
Home Equity Investment vs. HELOC vs. Home Equity Loan
| Feature | Home Equity Investment | HELOC | Home Equity Loan |
| Monthly payments | None | Yes (fixed or variable) | Yes (fixed) |
| Credit requirement | As low as 500 | Typically 620+ | Typically 620+ |
| Income requirement | None | Required | Required |
| Repayment structure | Lump sum at exit | Draw period + repayment | Fixed monthly installments |
| Best for | Equity-rich, lower-income, or credit | Flexible ongoing needs | One-time lump sum with repayment ability |
If you qualify for a low-rate HELOC or home equity loan, it’s worth comparing these products before committing to an HEI.
Who Should Consider a Home Equity Investment?
A home equity investment may be a good fit for homeowners who have substantial equity in their home and are looking for an alternative way to access it. The following groups are often among the best candidates:
- Self-employed borrowers who can’t easily document income for a conventional loan application
- Retirees on a fixed income who have strong home equity but limited earnings
- Homeowners with lower credit scores who may not qualify for a HELOC or home equity loan
- Those facing a large one-time expense, such as medical bills, home repairs, tuition, etc., who can’t absorb an additional monthly payment
- Homeowners who plan to stay long-term and can realistically settle the agreement through a future sale or refinance
When a Home Equity Investment May Not Be the Right Fit
A home equity investment is unlikely to be the right choice if you qualify for a low-rate traditional loan and expect your home to appreciate significantly. In high-appreciation markets, sharing 20–25% of your home’s future value can end up costing considerably more than a conventional loan with interest would have.
It may also not be the right fit if:
- You plan to move in the near future, as the upfront fees make short holding periods expensive
- You want to preserve as much future home value as possible for heirs or retirement
- You’re already carrying significant debt that could affect your ability to settle, in which case addressing existing debt first may be a smarter starting point. A debt consolidation loan may help stabilize your finances before pursuing an HEI.
- The lump-sum balloon repayment at settlement feels difficult to plan for on a fixed or unpredictable income.
What to Look for When Comparing Home Equity Investment Companies
The most important factors when comparing HEI providers are funding range, fee structure, term length, and state availability. Before choosing a provider, evaluate:
- Funding range: How much of your equity can you access, and is there a minimum?
- Share of appreciation vs. share of value: Some providers take a percentage of total future home value; others take a percentage only of appreciation. A lower percentage doesn’t always mean a lower cost.
- Term length: How long do you have before you must settle?
- Processing and origination fees: These typically come out of your proceeds at closing and reduce the total amount you receive.
- Minimum credit score and income requirements: These vary between providers.
- State availability: Not all HEI companies operate in all states
- Depreciation sharing: Does the company share in losses if your home value declines?
- Customer reviews: Check Trustpilot and BBB complaint history for patterns in how the company handles disputes and appraisal disagreements.
A Home Equity Investment Provider Worth Knowing: Point (Point Digital Finance)
Point is one of the most established and widely available home equity investment providers currently operating. Founded in 2015 and based in Palo Alto, California, Point has funded more than 25,000 homeowners and deployed over $2.5 billion in home equity investments, making it one of the largest and most experienced players in the category.
Point Key Details
| Founded | 2015 |
| Homeowners Funded | 25,000+ |
| Total Funded | $2.5B+ |
| Funding Range | $30,000 – $600,000 |
| Max Equity Share | 20% to 25% |
| Term Length | Up to 30 years |
| Minimum Credit Score | 500 |
| Minimum Home Value | $155,000 |
| Income Requirement | None |
| Closing Fees | 3.9% processing fee (min. $2,000) plus third-party fees typically totaling $1,393–$3,389 at closing; all deducted from investment proceeds — no out-of-pocket costs |
| Exit Fees | Third-party fees of $90–$1,320 at repayment, covering reconveyance, recording, and possible appraisal |
| Funding Timeline | ~45 days |
| States Available | 27 states + Washington D.C.: Arizona, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Kentucky, Maryland, Michigan, Minnesota, Missouri, Nevada, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Utah, Virginia, Washington, Wisconsin, and Washington D.C. |
| Trustpilot Score | 4.7/5 (5,300+ reviews) |
| BBB Rating | A+ Accredited |
What stands out about Point:
Point’s 30-year term is longer than most competitors, giving homeowners more flexibility on timing without pressure to settle quickly. The 500 minimum credit score requirement and lack of an income requirement make it accessible to a substantially wider range of homeowners than traditional lenders, including retirees, self-employed borrowers, and those between jobs.
Point shares in both appreciation and depreciation. At closing, Point sets an appreciation starting value lower than your home’s full appraised value, and all gains and losses at settlement are calculated from that figure. If your home’s value falls below that threshold, your repayment may be less than what you originally received.
Processing Fee
Point’s processing fee of up to 3.9% is deducted from your proceeds at closing and is not a separate payment. This could equal up to $3,120 deducted from your lump sum for an $80,000 investment. Factor this into your net cash calculation before comparing to other options.
Customer Feedback
Point holds a 4.7 out of 5 rating on Trustpilot with more than 5,300 reviews. Many reviewers note the fast and transparent process when obtaining funding. The most common complaints involve paperwork volume and occasional changes to funding amounts after appraisal.
One important note
Point is available in 27 states and Washington, D.C. However, some states have more limited availability. Verify your eligibility by entering your address directly at point.com before moving forward.
