HomeFunds Home Equity Investments

HomeFunds Home Equity Investments Review

HomeFunds Home Equity Investments is offered by homefunds, a financial services company founded in 2020 and based in Los Angeles, CA. HomeFunds Home Equity Investments are available in 1 state across the USA.

Key Takeaways

• Poor credit accepted. Homeowners with a credit score as low as 530 can qualify with HomeFunds Home Equity Investments.
• Maximum investment of $350,000. Your actual offer will depend on the value of the home and how much equity you have in the property.
• 10-year term. The investment has a contract term of 10 years, at which time you'll need to settle up with HomeFunds. You can do so by paying them in cash, getting cash-out refinancing, selling your home, or partnering with HomeFunds for another term.

HomeFunds Home Equity Investments Pros & Cons

HomeFunds Home Equity Investments FAQ

How does the HomeFunds Home Equity Investments product work?

A shared equity agreement (also called home equity contract) is essentially a way to sell a portion of the equity in your home to an investment company.

HomeFunds Home Equity Investments will have a lien on the property (just like a mortgage does), but since it's not a loan you won't be paying HomeFunds Home Equity Investments interest or a monthly payment. Instead HomeFunds Home Equity Investments gets paid a share of your home's value when the contract ends, which typically occurs when you decide to sell your home or buy HomeFunds Home Equity Investments out. For example, HomeFunds Home Equity Investments might provide you with a cash investment today equal to 10% of your home's current value in exchange for 16% of your home's future value when you sell.

How much will HomeFunds invest into a shared equity agreement?

The HomeFunds Home Equity Investments program offers equity investments that range from 3% up to 5% of a property's market value. As you might expect, HomeFunds has a cap on the amount of funding they will invest in a single home. The most HomeFunds can invest in a single home is $350,000.

What are the costs associated with HomeFunds Home Equity Investments?

Unlike loans, the cost associated with an HomeFunds investment is not based on an interest rate. There are no monthly payments or accrued interest. Instead, HomeFunds shares in the future value of your property and typically only receives a return on its investment when you sell your home or decide to buy HomeFunds out. The percentage of your home’s value that HomeFunds shares when the contract ends is larger than the percentage of HomeFunds's investment in your home. Therefore, HomeFunds will make a profit if your home’s value does not change. If your home’s value increases, HomeFunds will make a larger profit. If the value drops, HomeFunds will make a smaller profit, or might incur a loss.

What are the terms for a shared equity investment via HomeFunds?

You can use the funds provided by HomeFunds Home Equity Investments for up to 10 years. After 10 years, you will need to settle up with HomeFunds, either by selling the home or buying HomeFunds out. You can finance a buyout with your cash, refinancing your mortgage, or by partnering with HomeFunds for another term.

To buy HomeFunds out, you would need to pay back their original investment plus or minus their share of your home’s change in value.

How long does it take to close a deal with HomeFunds?

HomeFunds Home Equity Investments does not disclose how long it typically takes to approve and fund a shared equity agreement.

What types of property does HomeFunds consider?

Shared equity investors often have restrictions on the type of properties they will invest in. HomeFunds Home Equity Investments will consider shared equity agreements secured by the following property types:

• Primary home
• Secondary homes and vacation properties.
• Investment properties.