Home Equity Investment (HEI) / Home Equity Agreement (HEA) — How to access your home equity without monthly payments.
You are selling a portion of your home's future value in exchange for cash today.
A lump-sum cash payment — typically tens of thousands of dollars — funded upfront with no monthly payment obligation.
A percentage of your home's future value or appreciation. The exact share depends on the provider and contract structure.
The provider records a lien on your property, similar to a mortgage. Your ownership rights remain intact while you live in the home.
The dollar amount the provider funds to you at closing. Typically expressed as a dollar figure and as a percentage of your home's appraised value.
The share of home value or appreciation the provider will receive at exit. This is the core of the contract and directly determines your cost.
The maximum length of time the agreement can remain open — often 10 to 30 years. At term end, you must repurchase your investment, typically by selling or refinancing.
The appraised value of the home at time of closing. This baseline sets the contract terms and affects how the provider's share is calculated.
The value of your home at the time of repayment (sale price, appraisal, or agreed-upon figure). Used to calculate the provider's final payment.
Some providers apply a downward adjustment to the starting home value to protect against downside risk.
An independent appraisal or automated valuation model (AVM) determines the current market value.
The provider funds a lump sum of cash — typically 10–25% of your home's value.
The provider records a lien on your property securing their financial interest.
When you sell, refinance, or reach the end of the term, you repurchase the provider's share of the home value or appreciation.
Important: You continue to own your home and live in it throughout the entire term.
These structures can produce different costs depending on home price appreciation or depreciation.
Investor receives a % of the total home value at exit
The investor gives you a lump sum today in exchange for a fixed percentage of your home's total value when you repurchase your investment. The investment as a percentage of the home value today is exchanged for a higher percentage of your home value in the future.
Investor receives a % of appreciation only
The investor gives you a lump sum today in exchange for a percentage of the increase in your home's value. Your home's current value is discounted at the start, meaning the baseline is typically set below today's actual market value.
The cost is deferred, not eliminated. Understanding the real cost is critical.
Your total cost is not fixed — it depends on these three factors working together.
The faster your home appreciates, the more the provider collects. In a fast-moving market, an HEI can become very expensive — potentially equivalent to a 10–15%+ annual interest rate.
The longer you hold the agreement, the more appreciation can occur. A 3-year exit may be quite affordable. A 20-year hold will likely cost significantly more dollars.
The equity percentage, model (total value vs. appreciation only), risk discount, origination fees, and tiered share schedules all affect total cost significantly.
Tip: Ask your provider to model different scenarios showing both the dollar costs and percentage return they are receiving.
There are four ways to settle an HEI/HEA agreement.
The most common exit. At closing, the provider is paid their share directly from the sale proceeds.
You refinance your mortgage and use a portion to buy out the HEI/HEA. Requires sufficient equity and creditworthiness at that future time.
If you reach the contract's end date (10–30 years), you must repay. There is no forgiveness at term end.
Some providers allow homeowners to buy back a portion of the equity share before full exit, reducing the outstanding obligation without fully settling.
Turn your home equity into dollars without selling your home or taking on more monthly payments.
Use the cash now and repay when you're ready — at sale, refi, or end of term.
Lower credit score and no debt-to-income requirements means most homeowners can qualify.
No restrictions on how you use the cash — medical bills, home improvements, debt payoff, retirement income.
Unlike variable-rate HELOCs, HEI/HEA costs aren't tied to interest rates — they're tied to your home value.
If your home declines in value, the provider shares in that downside (under most contract structures).
This comparison is educational and general in nature. Actual terms vary by lender, credit profile, and property.
| Feature | HEI / HEA | HELOC | Cash-Out Refi | Reverse Mortgage |
|---|---|---|---|---|
| Monthly Payments | None | Yes (variable) | Yes (fixed) | None required |
| Cost Predictability | Low (tied to home value) | Medium (rate changes) | High (fixed rate) | High (set rate) |
| Credit Requirement | 500+ FICO | 660–700+ FICO | 620–680+ FICO | No FICO minimum |
| Income Verification | None | Yes | Yes | No (age/equity) |
| Age Requirement | None | None | None | 62+ years old |
| Risk if Home Appreciates | Medium (repurchase grows) | Low (fixed payment) | Low (fixed payment) | Low (loan grows) |
Consult a licensed Mortgage Loan Originator for terms specific to your situation.
Home equity is often a family's most valuable asset. Sharing a percentage reduces the upside you — or your heirs — will receive.
If your home appreciates significantly, the effective cost of the HEI/HEA could exceed what a traditional loan would have cost. All providers have a maximum return threshold.
The repayment comes in one lump sum at exit. This product is not suitable for everyone. Always model the total cost and exit timing scenarios before proceeding.
Risk discounts, tiered equity shares, and appreciation-only vs. total-value models make apples-to-apples comparison difficult.
If you pass away before exiting, your estate must repay the provider. HEIs are not forgiven at death — your heirs inherit both the home and the obligation.
The recorded lien can complicate refinancing, taking another mortgage, or certain estate planning strategies. Always consult a real estate attorney before proceeding.
Setting the record straight on what an HEI is — and isn't.
A Home Equity Investment is a significant, long-term financial decision. You should never feel rushed, pressured, or obligated to sign.
If you ever feel coerced or unsure, stop the process immediately.