Every equity product we’ve talked about so far, the Business Purpose HELOC, the term loan, the line of credit, has one thing in common. You borrow money, and you pay it back, usually every month, usually with interest. There’s a version of accessing home equity that skips that entirely. No loan. No monthly payment. No interest charged. It’s called a Home Equity Investment (HEI), and it works completely differently from anything else on this list.
What Is a Home Equity Investment (HEI)
An HEI isn’t a loan at all. It’s an investment. A company gives you a lump sum of cash today, up to 15 percent of your home’s current value, in exchange for a share of your home’s future change in value. Not a share of the sale price. A share of the change from where the value sits today to where it sits when the agreement ends.
You keep living in your home. You don’t make a single payment for as long as the agreement runs. Nothing gets paid back until you sell, refinance, or hit the end of the agreement’s term, which typically runs up to 30 years. You control that timeline, not the investor.
How the Math Actually Works
This is the part that trips people up, so let’s walk through it with real numbers.
Say your home appraises at $1,000,000. A 5 percent risk adjustment gets applied, bringing the starting agreed value to $950,000. You receive $100,000 in cash, 10 percent of that starting value. The investor’s share of future appreciation is calculated as your investment percentage multiplied by 4, so a 10 percent investment translates to a 40 percent share of the change in value, capped at 60 percent regardless of how the math works out.
| Scenario | Original Agreed Value | Sale Price | Change in Value | Investor’s 40% Share | Total Payment Due |
|---|---|---|---|---|---|
| Home gains value | $950,000 | $1,050,000 | +$100,000 | +$40,000 | $140,000 ($100k investment + $40k share) |
| Home loses value | $950,000 | $850,000 | -$100,000 | -$40,000 | $60,000 ($100k investment minus $40k share) |
| Home value unchanged | $950,000 | $950,000 | $0 | $0 | $100,000 (original investment only) |
The part people miss: If your home loses value, the investor shares in that loss too. You’re not on the hook for the full original payment regardless of what happens to your home. That downside sharing is baked into the structure, not an exception.
Who Qualifies for an HEI
The underwriting here looks less like a mortgage application and more like a partnership review. Typical requirements:
- Credit score of 620 or above, verified with a soft credit pull that doesn’t impact your score
- Combined loan-to-value up to 85 percent, with senior liens capped around 70 percent
- Debt-to-income generally under 65 percent, though some programs waive the DTI requirement entirely for borrowers with strong credit and low existing loan-to-value
- No bankruptcies or foreclosures in the last 5 years
- Eligible property types typically include primary residences, single-family homes, 1-4 unit properties, second homes, and condos
- Standard documentation: income verification, homeowners insurance, mortgage statement, photo ID
HEI amounts generally run from $30,000 up to $500,000, with the exact figure driven by your home’s value and how much of that value you’re willing to share.
What an HEI Actually Costs You
There’s no interest rate here, which throws people off since there’s nothing to compare against a HELOC’s APR. Instead, the cost shows up in two places. First, a transaction fee, typically in the high 3 to low 5 percent range of the investment amount, charged at closing. Second, and this is the real cost, the share of appreciation you give up if your home’s value goes up.
That second piece is where these deals live or die for the homeowner. If your home appreciates significantly over the years you hold the agreement, that appreciation share can end up costing considerably more than a traditional loan would have. If your home’s value stays flat or drops, this structure can end up being the cheapest option on the table, since you never paid a dime of interest along the way.
Where an HEI Beats a Loan, and Where It Doesn’t
This product makes the most sense for a specific kind of situation:
- You need cash but don’t want another monthly payment added to your budget
- You have meaningful equity but don’t want to increase your debt load or debt-to-income ratio
- You’re not planning to sell in the next few years, since the appreciation math needs time to play out
- You’re comfortable with genuine uncertainty about the total cost, since you won’t know the exact payoff amount until the agreement ends
Where it doesn’t make sense: if you’re confident your home is about to appreciate significantly, faster than the local market average, giving up 40 percent or more of that gain can get expensive fast. And if you’re the type who wants a fixed, predictable number to plan around, the open-ended nature of an HEI will drive you crazy. A loan tells you exactly what you’ll owe. An HEI tells you a range, and the range depends entirely on your local real estate market.
HEI vs Business Purpose HELOC
The most common comparison is against a Business Purpose HELOC, and the honest answer is they solve different problems. A HELOC is debt, it shows up on your credit report, it requires a monthly payment, and it charges interest you know upfront. An HEI adds no monthly obligation and no interest rate, but the eventual cost is variable and tied to your home’s future performance, something nobody can predict with certainty.
If cash flow today is the priority and you’re comfortable with debt, a HELOC is usually the more predictable, and often cheaper, option. If avoiding any new monthly payment is the priority, even at the cost of some unpredictability down the road, an HEI fills a gap nothing else on this list fills.
Bottom Line
An HEI isn’t the right tool for everyone, and it’s genuinely one of the more complex products to explain because the cost isn’t a fixed number you can point to. But for the right homeowner, someone who wants equity access without adding a payment to their monthly budget, it’s a legitimate option that most people have never even heard of. Worth a real conversation before you rule it out.
