Hometap expands home equity investment product in 6 new states

Home equity investment platform Hometap is looking to capitalize on home equity to offset surging mortgage rates by expanding to six new states. 

The fintech launched its home equity investment product in Alabama, Kentucky, Nebraska, New Hampshire, New Mexico and Wisconsin, bringing Hometap's availability to 27 states, the company announced Wednesday.

Home equity lending accounted for 17.5% of all mortgage transactions last year, while the number of mortgage loans originated fell by 50% from 2021 to 2025. Hometap joins Better, FirstClose and Nada in looking to expand its market share.

Hometap maintains that its product is not a mortgage loan. It provides homeowners with cash in exchange for a share of their home's future value, with no monthly payments during the investment term. Homeowners have up to 10 years to settle the investment through a home sale, refinance or buyout, and can use the funds for a range of financial goals. It also allows homeowners to keep the terms they already have.

"Every expansion decision we make starts with homeowner need, and these six states sent us a clear signal," CEO Jeffrey Glass said in the release. "Nearly 5,000 homeowners here reached out over the past few years looking for a flexible alternative to traditional financing. Their situations look different from one state to the next, but the common thread is the same: they've built real equity, and they want a way to use it that doesn't add to their monthly budget."

All six of the new states have seen notable increases in home equity over the past few years. Alabama homeowners have seen equity more than double since 2020 but struggle with rising insurance bills, as do households in Kentucky, Nebraska and New Mexico, according to the release.

This compounds with mortgage rates that now hover above 7%, and the lock-in effect has kept many homeowners from refinancing to access equity. Additionally, 35% of traditional equity-extraction mortgage applications were denied in 2024, mostly due to credit score or debt-to-income ratio requirements, according to the Urban Institute.

Hometap has now added 12 states this year, following the inclusions of Georgia, Montana, Tennessee, Idaho and Delaware in June.

"This is what thoughtful growth looks like to us," Glass said. "We expand where homeowners actually need another option. That means doing the legal, regulatory, operational and homeowner demand due diligence in every state before we ever launch. Most of the homeowners we talk to are looking for access to their own equity, on their own terms."

Legal troubles

In the midst of its expansion, Hometap has faced a wave of class action lawsuits over its shared-appreciation contract product that litigants described as "predatory and abusive." Consumers accused the company of violating the Truth in Lending Act for failing to treat their product as a mortgage loan. Hometap has argued that its product is not a mortgage loan.

These suits came after a state regulatory sued Hometap for allegedly violating consumer protection laws by using deceptive marketing that targeted vulnerable households and put them at future risk of foreclosure.