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American homeowners now have nearly $36 trillion in home equity, according to estimates Federal Reserve dataThis is a record number, but most of that wealth is locked inside the walls of the house and cannot be spent easily.
A home equity agreement is one of the newest ways to take some of that money out in cash without taking out a monthly payment, and interest has been rising as borrowing costs remain stubbornly high.
What is a home ownership agreement?
A home equity agreement, or HEA, is a contract in which an investor offers you a lump sum of cash today in exchange for a percentage of the future value of your home.
You incur no debt, pay no monthly payments, and accrue no interest.
Instead, you settle later, when you sell the home, refinance it, or buy back the investor’s share, usually anytime within 10 to 30 years.
The product itself goes by several names, including a home equity investment, or HEI, a shared equity agreement, and a home equity share agreement, but they all describe the same trade: cash now for a slice of your home’s value appreciation later.
How a home ownership agreement works
The process begins when you submit an application and the company requests an appraisal of your home.
If you qualify, the provider sends an offer based on three numbers: the amount of cash you can get, the share of future value the investor will collect at settlement, and the length of the term.
The investor then records a lien on your property, just as your mortgage lender has already done, to secure his share.
From that point you owe nothing from month to month.
Let’s say your home is worth $500,000 and a company gives you $50,000 in exchange for a 25% share of the future value of your home.
If you sell years later for $700,000, the investor is owed the original $50,000 plus 25% of the $200,000 in appreciation, which is another $50,000, for the $100,000 refund.
If the home loses value instead, many agreements have the investor’s share of the loss, so your settlement could come in less than you might expect.
What it costs
Cash is not free, although there is no interest rate attached to it.
Most providers charge an upfront processing fee, often between 3% and 3.9% of the amount you receive, plus third-party costs such as appraisal, escrow, and government registration fees.
The biggest cost is the estimate you give up, and this number cannot be known at signing.
In a hot housing market, the actual cost of an HEA can be much higher than what you would pay on a conventional loan, which is the central trade-off of the product.
How does it compare to a HELOC or home equity loan
Both a home equity line of credit and a home equity loan allow you to borrow against your equity and repay with interest over time, and you keep 100% of any appreciation.
An HEA flips this arrangement by removing the monthly payment and interest, but handing the investor a share of your principal.
Mathematics relies heavily on grades, and grades have remained high.
As of mid-2026. Base interest rate up to 6.75%with average HELOC rates in the low 7% range, which is significantly less than the roughly 21% the average credit card now charges.
This gap is part of the reason why many homeowners are considering how to cash in on stocks right now, especially with the Federal Reserve keeping its benchmark interest rate at 3.50% to 3.75% for three consecutive meetings before its decision scheduled for June 16-17.
If you want to see how the two products stack up in terms of cost, flexibility and qualifications, we’ve compared HEA vs. HELOC side by side.
Who can qualify?
The appeal of the HEA program is that it reaches people who are often turned away by traditional lenders.
Because repayment is based on your household rather than your salary, most providers do not impose income or debt-to-income requirements.
Credit standards are also more flexible, with some companies approving scores as low as 500, which is well below the typical minimum for a HELOC.
What you need is equity, generally in the range of 20% to 40% of your home’s value, as the investor wants a cushion behind his position.
When HEA makes sense
The product tends to suit homeowners who can’t or don’t want to add another bill to the monthly budget.
This includes self-employed borrowers with uneven income, retirees living on steady cash flow, and people working through a period of unemployment or poor credit.
It’s more convenient if you have strong credit and a steady income, because a HELOC, home equity loan, or cash-out refinance is usually less expensive over time.
It is also not suitable if you expect a rapid rise and want to maintain that gain, or if you plan to sell within two or three years and a long share holding period is overkill.
What is the market size?
Higher education institutions are still a small corner of the broader home equity market, but the niche has grown rapidly.
According to Consumer Financial Protection Bureauthe four largest HEIs created approximately 11,000 home equity contracts worth $1.1 billion in securitization volume between January and October of 2024.
This growth is fueled by record equity balances that are hitting a price environment that has kept many potential borrowers on the sidelines.
A closer look at the point
Point is one of the most established names in the industry, having been founded in 2015 and reportedly having worked with over 25,000 homeowners.
Investing in home equity gives you a lump sum in exchange for a share of the future value of your home, with no monthly payments and a 30-year window to settle by selling, refinancing or buying the share.
The company accepts credit scores as low as 500, does not weight income or debt-to-income, and can invest up to $500,000 in a single property.
They also implement a homeowner’s protection cap that limits how much your share of appreciation can grow, putting a cap on the cost if your home’s value rises.
Pre-qualification is done through a soft credit pull and takes about one minute, with a hard pull only when a complete application is submitted, and funding typically arrives within three weeks.
If you want to run your numbers, The point provides an estimate without obligation It states the amount of cash, share of stock and how long you will be offered before any hard credit check.
There’s one detail worth emphasizing before you get started: Point’s HEI is available in approximately 27 states plus Washington, D.C., so the first thing to check is whether your state is on the list.
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