With real estate prices on the rise, homeowners may be looking for ways to tap into their home equity. But HELOCs and other loans require monthly payments that may tighten cash flow for homeowners who would prefer not to make the payments.
Home equity sharing agreements allow homeowners to bypass those requirements. These arrangements allow a third party to buy a portion of your home equity. You get the cash now, and they get a portion of the sales when you sell. As long as home prices keep going up, everyone wins.HomePace is one of the innovative companies offering home equity sharing agreements in six different states. Here’s how the company works.
- HomePace “co-invests” up to 15% of the value of your home.
- Use a HomePace investment instead of a HELOC or down payment loan.
- Make no payments for up to 15 years.
Up to $250,000
Up to 15 Years
3% to 4%
What Is HomePace?
HomePace is a home equity investment company. Based out of Park City Utah, HomePace “co-invests” with homeowners in six different states (Washington, Arizona, Utah, Colorado, North Carolina, Tennessee). It allows homebuyers and homeowners to sell a portion of their homes without moving out. HomePace gives the homeowner cash and does not collect any payments for 15 years or when the homeowner sells.
HomePace raises money for home equity investments through institutional investors such as pensions and hedge funds. These institutional investors are looking for exposure to the US Real Estate market, and they can gain that exposure through HomePace.
What Does It Offer?
HomePace offers “co-investment” opportunities for homeowners seeking immediate cash. When a homeowner partners with HomePace, they receive a cash lump sum which can be used any way the homeowner wishes. In exchange, HomePace receives a share of equity in the home. It will receive repayment when you sell the house or in 15 years, whichever is sooner.
These are some of the most important features of a HomePace co-investment.
Up To $250,000
HomePace will buy up to 15% of your home's fund for a maximum of $250,000. Homeowners can use these funds as a down payment on their home, to pay off debt, or to do just about anything they want.
No Monthly Payments
Over the past two years, home prices have seen strong growth. But homeowners can’t easily take advantage of their newfound wealth. HELOCs and refinancing mortgages require monthly loan payments. HomePace solves that by directly purchasing equity. Homeowners don’t make any payments to HomePace until they sell their house or after 15 years.
Retain Your Position As A Homeowner
When HomePace buys a share of the equity, it becomes a secondary lien holder on the property. However, you will retain your position as the homeowner.
No Out-Of-Pocket Costs
HomePace charges a 3-4% origination fee which is deducted from the funds the homeowner receives. Because it is deducted from the original funds, homeowners never pay the fees out of pocket.
Good Credit Required
Although HomePace doesn’t require monthly payments, it checks homeowner credit scores. Homeowners must have a 630 credit score to be considered for a home equity investment from HomePace.
Only Available In Limited States
Currently, HomePace offers investments in:
- North Carolina
HomePace strategically invests in areas of the country seeing rapid growth. If you live in one of those states, you may be eligible for equity sharing. But other requirements apply.
Are There Any Fees?
People who receive an investment from HomePace don’t pay out-of-pocket fees, and they aren’t charged an interest rate. But the HomePace investments aren’t free money.
When a homeowner takes on HomePace as a co-investor, they “pay” a 3-4% origination fee to HomePace. HomePace deducts the fee from the cash received by the homeowner, so homeowners never feel that payment. However, it would mean if you did receive a $250,000 co-investment, you'd actually only get $242,500 deposited into your bank account (that's a 3% fee).
Additionally, homeowners have to repay HomePace when they sell their house (or after 15 years). Upon selling, HomePace receives a set percentage of the proceeds of the sale of your home. The share stays the same whether your house grows or falls in value.
How Does HomePace Compare?
HomePace is one company in the growing home equity sharing space. The 15-year term is somewhat longer than the standard 10-year term. However, it is not as long as Unison's 30-year term. It has reasonable credit requirements, but Point might be a better alternative for people with poor credit. Plus, the small number of states that HomePace operates in is the fewest of any of the current competitors in the market.
One advantage that HomePace has over most of its competitors is the buy-out flexibility. Typically, homeowners can buy out the investor at any point within 15 years. Homeowners who receive a cash windfall may choose to repurchase their home equity, so they can stay in the house or buy back the future upside.
Up to $250,000
Up to $350,000
Up to $500,000
How Do I Open An Account?
To see if you’re eligible for a home equity sharing agreement, request a free quote from HomePace. Eligible people will need to complete a full application which includes a credit check and a full appraisal of their home.
Homeowners who want to move forward will receive a full cost agreement that details the exact terms of the agreement. Homeowners can choose to back out at any time until they sign the agreement.
Is It Safe And Secure?
HomePace uses escrow accounts, title deeds, and other standard real estate processes to work with investors. HomePace has not been subject to any data breaches, and it has the infrastructure to communicate securely with potential customers.
That said, real estate transactions always seem to attract scummy hackers looking to make money. Homeowners should never email personal details to HomePace throughout the application process. In particular, they should not email bank details or Social Security Numbers. Instead, they should use secure web portals where information is encrypted.
How Do I Contact HomePace?
HomePace is headquartered in Park City Utah. The company allows prospective homeowners to request a quote directly through its website. People with questions can also contact HomePace via email at email@example.com or by phone at (919) 737-7637.
Is It Worth It?
HomePace may be a decent option for homeowners who expect to move in a decade or less. If you’ve found your forever home, it may not make sense to take on HomePace as an equity investor. It’s an investment product designed with a maximum time horizon of 15 years.
Home equity investments are a relatively new concept. Homeowners who aren’t actively building wealth outside of their primary residence may accidentally sell a large share of their only appreciating asset. That could leave them poorer in the long run.
A HomePace investment could be strategic. It could allow you to get the cash for a rental property or another long-term investment. But it's also possible to sell your equity only to spend it on one-time experiences like vacations or depreciating assets like cars or other vehicles. People considering this or any other form of home equity sharing should be very careful before signing up. It is not free money, and it should be treated as a loan even though it has no monthly payments.
3-4% transaction fee
Max Loan-to-Value Ratio (LTV)
Average Credit Score
Max Debt-to-Income Ratio (DTI)
Interest Rate Type
Customer Service Number
Customer Service Hours
Mon-Fri, 8 AM – 5 PM (MST)
Customer Service Email
Mobile App Availability
Rates & Fees
Ease of Use
Products & Services
HomePace is a HELOC alternative that’s called a shared-equity agreement, where you can sell equity in your home.
- No Monthly Payments.
- Take advantage of home equity without selling.
- HomePace shares in upward and downward price changes.
- The homeowner loses out on some of the future value of their home.
- Could end up being more expensive than loan alternatives.
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared toward anyone wanting to earn more, get out of debt, and start building wealth for the future.
Editor: Claire Tak