Home equity agreements (HEI)

A home equity agreement, also called a home equity investment, gives you cash today in exchange for a share of your home's future value. There's no monthly payment and no interest rate.

Reviewed by Shawn Way, NMLS #1007298★ 4.9 from 111 reviewsUpdated October 28, 2026

How it works

1. The company appraises your home and pays you a lump sum, often 10%–20% of the home's value.
2. It records a lien and takes a share of the home's future value or appreciation, set in the contract.
3. You make no monthly payments. You still pay taxes, insurance and upkeep.
4. At sale, refinance or the end of the term, you pay the company its share.

The real cost

If your home rises in value, the company's share rises with it, and the effective cost can be well above HELOC rates. If values fall, you may owe less than you received. Read the contract for caps, minimum returns and fees, and run a best and worst case before signing.

HEI or HELOC?

• HELOC: cheaper if you can qualify and carry the payment.
• HEI: no payment and looser credit and income rules, at a cost tied to your home's growth.
• Age 62+: compare a reverse mortgage too.

An example with appreciation

A homeowner with an $800,000 home receives $80,000 in exchange for 15% of the home's future value (terms vary widely by company). If the home grows 4% a year, it's worth about $1,184,000 in 10 years. The company's share is then about $177,600, more than double the cash received. A HELOC for $80,000 at 7.75% APR, paid off over the same 10 years, would cost about $35,200 in interest, for a total of about $115,200.

If the home's value is flat or falls, the HEI costs much less; some agreements share losses too. That's the bet: an HEI is cheap if values stagnate and expensive if they rise.

Terms to read closely

• The starting value. Many companies apply a "risk adjustment," setting the starting value below the appraisal, which increases what you owe.
• Caps. Some agreements cap the company's return at an annualized rate. Others don't.
• Fees. Origination fees of 3%–5% are common.
• Home improvements. Whether you get credit for value added by your own remodel.
• Ending early. How the buyout is calculated if you settle before selling.

Who it fits

Homeowners with substantial equity who can't qualify for a loan payment, need cash for a defined purpose, and expect to sell within the term. It's a poor fit if you plan to stay in a home you expect to appreciate strongly.

Questions to ask an HEI company

• What starting value will you use, and how does it compare to the appraisal?
• Is there a cap on what I'll owe?
• What fees are deducted from the cash I receive?
• How do you credit improvements I make?
• What happens if I can't settle at the end of the term?

When an HEI can be the better choice

A 60-year-old with a paid-off $900,000 home and irregular consulting income needs $100,000 to bridge a few slow years and plans to sell in five years to downsize. Lenders struggle to verify his income. An HEI gives cash with no monthly payment, and over five years the cost is more predictable than over a long hold. If he expected to stay 20 years, the same agreement could cost several times as much.

Also asked

Is a home equity agreement a loan?

No. It's an investment contract: the company buys a share of your home's future value. There's no monthly payment and no interest rate, but the cost depends on how much your home appreciates.

More in loan programs

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• Home equity loans
• Third-lien home equity loans
• Texas 50(a)(6) cash-out refinance
• Bridge loans
• Cash offer programs
• Equity with a credit score under 580
• No income or employment verification
• Blanket and cross-collateral loans

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