HEIs see boost from investors but also legal setbacks

Economic trends look to be a primary driver in growth of the home equity investment segment, which is seeing investor interest and liquidity enter the market in the new year but also ongoing legal obstacles. 

Current housing costs are paving the way for consumer uptake. In a survey conducted last summer by HEI provider Hometap, 45% of property owners indicated housing expenses were a primary source of stress on their budgets. Over 79% also said they were spending more than ever to cover those expenses. 

Those increased financial worries come at a time when burgeoning insurance premiums also take larger bites out of homeowners' wallets. At the same time, research shows rising interest in remodeling and renovation instead of relocation — a trend that might fuel home equity draws — as many choose to remain in place in order to hold on to their favorable mortgage rates. 

The combination of factors provides tailwinds for the still-maturing businesses in the segment, according to a recent HEI outlook report published by Hometap. HEI products, also sometimes referred to as shared-appreciation or home-equity agreements, allow property owners to cash out a percentage of the accrued value in their homes in exchange for an agreed-upon share of its future worth. 

"What began as an alternative approach to home financing is increasingly shaped by homeowner demand, institutional participation and more active regulatory engagement," the report said. 

While the HEI market saw momentum build throughout 2025, especially in secondary market deals, consumer watchdogs and regulators continue to closely scrutinize the design and terms of contracts, which many homeowners said they did not understand in multiple lawsuits.

Following are some of the developments to hit the HEI community recently.   

The return of Balance Homes

Originally launched in 2021, the provider of equity-sharing agreements it calls a "flexible co-ownership alternative," re-emerged in January with the backing of global investment firm Falco Capital. The platform aims to provide solutions for "homeowners squeezed between record debt burdens," it said at the time of its relaunch. 

Initially founded in 2021, Balance Homes was acquired by the now-defunct Easyknock in late 2023. Easyknock abruptly closed shop exactly one year later after multiple lawsuits and enforcement action from several state regulators and attorneys.   

HEI business alliance expands

The Coalition for Home Equity Partnership, a consortium of contract providers and supporting businesses, announced the addition of seven new members at the end of 2025.   

First formed in 2024 by founding executive members Hometap, Point Finance and Unlock Technologies, CHEP welcomed fellow HEI platform Nada into the coalition alongside title firms Clearedge and First American in its premier-industry tier. 

Joining as business-partner members were law firms Bradley Arant Boult Cummings and Goodwin Procter. Also new to the business-partner level were servicer BSI Financial and banking and loan product marketplace Supermoney. 

CHEP aims to serve the HEI community by establishing strategies and guidance that promote a broad industry framework for regulation at the state level and education among consumers. 

Courts rule against HEI providers

Even as HEI providers seek to work with state regulators, recent rulings illustrate the challenges they face in defining and marketing their products.  

An ongoing lawsuit against Hometap filed early last year by the Massachusetts attorney general is moving forward in 2026, despite attempts to have the case thrown out. In December, a judge ruled that prior approval of Hometap's business model could not be used as an argument to dismiss an enforcement case filed on behalf of the public. The same judge last summer also pushed back against claims that HEIs did not fit the definition of a loan, a term that lies at the center of legal arguments over how regulations can be applied to them. 

Also, in December, Unison, a pioneer of home equity investments, settled a lawsuit in Washington State after a panel of judges said its product amounted to a reverse mortgage on appeal. The legal decision reversed a prior ruling in Unison's favor issued two years earlier. 

Elsewhere in regulation, HEIs are currently facing potential limits to their ability to operate in Maine if proposed legislation passes this year. The legislation states a shared-appreciation agreement could not be used to create a lien against real property covered by the contract, effectively serving as a de facto ban against HEI platforms, CHEP argued.  

Nada raises new capital; Splitero issues rated securitization

Even while HEI agreements are frequently under legal scrutiny, the venture capital pipeline remains open, with Nada on the receiving end of VC interest to start the year.

In late January, Nada reached a deal with Medalist Partners to sell $150 million worth of equity agreements to the investment firm, supplying it with a reliable source of capital to scale and originate agreements. 

The news follows Hometap's $50 million funding raise, led by Gallatin Point Capital, and a $2 billion commitment from Blue Owl Capital to Point. Both agreements were announced in December. 

The new investment deals arrived after several breakthroughs throughout 2025 for HEIs in the secondary markets that will give providers additional liquidity to scale operations. 

In November, Splitero issued a $283.3 million transaction, with funds managed by Blue Owl, Antarctica Capital and Kingsbridge Investment Partners. The securitization was termed a significant milestone for the company by Splitero founder and CEO Michael Gifford. 

The past year also saw other HEI securitization deals coming from Beeline Hometap, Unlock and Point.  

"Robust appetite for these products and a growing investor base over the course of the year signal long-term conviction for the asset class," said Cara Newman, head of structured finance at Hometap, in its HEI outlook.