Home Equity Investment (HEI)
An Option Worth Understanding
A home equity investment lets you access cash from your home’s equity without taking on a traditional loan or monthly payments to the provider. But HEIs carry real costs and obligations that are important to understand before deciding whether one is right for you.
See My OptionsWhat Is a Home Equity Investment?
A Home Equity Investment (HEI) is an arrangement where a homeowner receives a lump sum of cash in exchange for giving an investment company a share of the home’s future value. Unlike a home-equity loan or HELOC, an HEI typically does not require monthly payments to the investment provider.
Instead, the homeowner owes a single settlement payment at a future date — usually when the home is sold, the contract term ends (typically 10–30 years), or certain other events occur. The settlement amount depends on the contract’s formula, which may consider both the starting and future home values, the amount received, and other adjustments.
House Partner helps Utah homeowners explore HEI options as part of a broader set of equity-based solutions. Whether an HEI makes sense depends on your specific situation, equity position, and financial goals.
How It Works
Tell us about your situation
Share your property information and what you're trying to accomplish. Takes about two minutes.
Explore your options
We'll review your situation and determine what equity-based options House Partner may be able to offer, including whether an HEI may be appropriate.
You decide what comes next
You're in control. Review what's available and decide whether to move forward — no pressure, no obligation.
Explore Your Equity Options
Tell us about your situation and we’ll help you understand what options may be available.
Benefits and Tradeoffs of an HEI
An HEI may offer advantages for some homeowners, but it also carries costs and risks that deserve equal consideration.
Potential benefits
- Typically no monthly payments to the HEI provider during the contract term
- May be available to homeowners who do not qualify for traditional loans
- Can provide a lump sum of cash without adding monthly debt payments
- The homeowner continues to live in and use the home
Costs and risks
- The settlement amount can grow substantially if the home appreciates, potentially costing more than a traditional loan
- If the homeowner cannot pay at settlement, they may face forced sale or foreclosure
- The lien on the property can limit refinancing and other financial options
- Existing mortgage, property taxes, insurance, and maintenance obligations continue throughout
- Contract terms are not standardized, making it harder to compare offerings
Benefits and risks vary by provider, contract terms, and individual circumstances. This is not an exhaustive list.
HEI vs. HELOC: Key Differences
Both HEIs and HELOCs allow homeowners to access equity, but they work very differently. Here are some of the key differences at a glance.
| Factor | HELOC | HEI |
|---|---|---|
| Monthly payments | Monthly payments required; some plans allow interest-only payments during the draw period | Typically none to the HEI provider |
| How costs work | Interest rate on outstanding balance | Share of future home value or appreciation |
| When you pay | Monthly during loan term | Single settlement at sale, contract end, or trigger event |
| Qualification | Generally requires good credit and income | May accept lower credit; varies by provider |
| Risk to home | Foreclosure if payments missed | Forced sale or foreclosure if settlement can't be paid |
For a more detailed comparison, see HELOC vs. HEI: Key Differences for Utah Homeowners.
What to Know Before Exploring an HEI
HEIs are not free money
While HEIs typically have no monthly payments to the provider, the settlement amount — determined by the contract’s formula — can be substantial. Origination fees of 3–5% are also common. The total cost depends on how much the home appreciates and the specific contract terms.
Your existing obligations continue
An HEI does not replace your mortgage. You continue to be responsible for mortgage payments, property taxes, homeowners insurance, and maintenance. Failure to meet these obligations can trigger a default under the HEI contract.
Settlement can be triggered by multiple events
Settlement — when you must pay the HEI company its share — can be triggered by selling the home, reaching the contract deadline, refinancing, defaulting on contract terms, or other events depending on the agreement. Have a realistic plan for how you will settle.
Agreements vary significantly
Some HEIs share appreciation; others use a share of the home’s total future value. There is no single standard formula. Contract terms, fees, and settlement calculations differ by provider. Understanding the specific terms of any agreement you are considering is essential.
Your home is at risk
HEI agreements typically involve a lien on the property. If you cannot pay the settlement amount when it comes due, you may be forced to sell your home or face foreclosure. The lien can also affect your ability to refinance or take out additional loans against the property.
Who May Be Eligible
Eligibility for an HEI varies by provider, property, and individual circumstances. General factors that typically affect eligibility include:
- The amount of equity in the home relative to the outstanding mortgage
- The property type, location, and condition
- The homeowner's financial situation and ability to maintain the property
- State-specific regulations and provider availability
- The homeowner's existing liens and obligations against the property
This is not a complete list of eligibility factors. Qualification depends on the specific provider and arrangement. House Partner does not guarantee eligibility or approval for any product.
Frequently Asked Questions
Is an HEI a loan?
HEI providers typically describe their products as "not a loan." Whether that characterization is accurate depends on the specific contract terms and applicable legal definitions. What is clear is that an HEI creates a financial obligation secured by your home — the homeowner owes a future payment, and the company holds a lien on the property.
What happens if my home loses value?
This depends on the specific contract. Some HEI agreements include downside protection, meaning the provider shares in the loss. However, some contracts still require a minimum payment regardless of home value changes. Review the settlement formula carefully for the specific agreement you are considering.
Can an HEI stop foreclosure?
Applying for an HEI does not itself halt foreclosure. While an HEI may provide cash that could be used toward past-due mortgage payments, qualification is not guaranteed, and the process takes time. Homeowners facing active foreclosure should contact their mortgage servicer and a HUD-approved housing counselor as first steps.
How is the settlement amount calculated?
Settlement formulas vary by provider. Some are based on a share of the home's total value at settlement; others focus on appreciation. Many apply a multiplier to the initial investment. Ask any provider to show you worked examples under multiple home-value scenarios — not just the best case.
Can I settle early?
Most HEI contracts allow early settlement, but the terms and costs vary. Some providers charge a minimum settlement amount or have a required waiting period before early buyout is allowed. Ask about early settlement terms before signing.
How does House Partner help with HEIs?
House Partner helps Utah homeowners explore equity-based options, which may include home equity investments. We help you understand what options may be available based on your specific situation. There is no obligation to move forward.
Learn More About Home Equity Investments
These guides provide more detail on how HEIs work, how they compare to other options, and what questions to ask before signing.
What Is a Home Equity Investment?
A plain-language guide covering how HEIs work, what they cost, settlement mechanics, and the benefits and risks.
Read the guideHELOC vs. HEI: Key Differences
A side-by-side comparison of home equity lines of credit and home equity investments for Utah homeowners.
Read the guideQuestions to Ask Before Signing an HEI
A checklist of questions every homeowner should ask — and get clear answers to — before entering an HEI agreement.
Read the guideWondering Whether an HEI Fits Your Situation?
Understanding your options is the first step. House Partner helps Utah homeowners explore equity-based solutions — including home equity investments — with no obligation to move forward.
Before entering any HEI agreement, consider consulting a licensed financial advisor or attorney who can review the specific terms and help you evaluate whether it makes sense for your circumstances.
Tell Us About Your SituationImportant: This page provides general educational information about home equity investments. It is not financial, legal, or investment advice. HEI terms, costs, and risks vary significantly by provider and contract. House Partner is not a lender or licensed financial advisor. Before entering any agreement that uses your home as collateral, consult a licensed financial advisor or attorney.
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