The Best Home Equity Investors for your Guesthouse

Compare the top Home Equity Investors and save thousands on your ADU

May 5, 2023

A home equity investment is a relatively new way to tap into the future equity in your home. In exchange, you will give a pre-agreed upon amount of future equity in your home to an investor.

If you’ve tried searching for financing for your ADU (Accessory Dwelling Unit), you’ve likely wasted hours of time with dead ends.

HELOCs and Cash-out refis are the most commonly referred lending products because they’ve been around for a long time, but they often don’t cover the high costs of an $100,000 - $200,000 ADU.

So if you find yourself getting rejected by a bank, or you simply don’t want to use up your primary home equity, there’s a smart financing option to finance ADUs, it's called an ADU Home Equity Investment. This loan allows you to tap into your future home value to unlock up to $500k in cash. In exchange, you share a portion of your future home's appreciation.

Here’s everything you need to know about Home Equity Investments and some of the top lenders in the space.

Equity Share VS Interest Loan

What is a Home Equity Investment, and Why Do They Make Sense?

A home equity investment is a relatively new way to tap into the future equity in your home. In exchange, you will give a pre-agreed upon amount of future equity in your home to an investor.

Home equity investments can be a great way to finance a prefab ADU, basement conversion, garage conversion, or any other home improvement.

Unlike a HELOC or cash-out Refi, you are not required to pay interest or monthly payments. Instead, you share the appreciation of your home with the lender once your investment comes to term, or your house is sold.

Home equity share agreements could be a great option for those looking to add an ADU to their property, or make some improvements before they sell their home.

How to Compare Home Equity Investment Lenders

When comparing home equity investment lenders there are a few things that you should make note of when evaluating each lender.  The first of which is the risk adjustment that they use when determining your home’s value.

This is the amount of money that a given lender discounts off of your home’s appraised value.  This metric is incredibly important, because the higher the risk adjustment is, the lower the lender’s cost basis is for their investment (a discounted cost basis for an investment means more “instant profit” for the investor).

Other details you should consider are the term of the investment, and whether or not you can pay it back early.  The ability to pay the investment back early is very important if you plan on using a home equity investment as a form of short term financing.  This is typically only done if you plan on refinancing your home to pay back the home equity investment.

Best Home Equity Investment Lenders

Some of the most prominent lenders in the home equity investment space are Unison, Splitero, Unlock,  Point, and Hometap.  Below, we’ve put together a brief synopsis of each lender and some of their biggest benefits (and drawbacks).  Remember, choosing the right lender can save you thousands of dollars over the long term.



  • Available in 28 States and the District of Columbia
  • $500,000 maximum investment amount
  • Low 2.5% risk adjustment


  • You may sell your home at any time, but you cannot buy out (pay off) Unison in the first five years of the agreement
  • If you sell within the first five years of the agreement, Unison will not share any losses
  • Minimum investment size of $30,000
  • Unison will only lend up to 17.5% of your home’s value



  • Splitero will invest in non-owner occupied properties
  • Investments can be made on a wide variety of properties, with values ranging from $150,000 to $5,000,000
  • Properties held in a trust may be eligible for Splitero funding
  • No minimum credit score requirements


  • You cannot receive an investment from splitero if your property is located on a parcel of 5 acres or larger.
  • Not transparent with regards to their risk adjustments
  • Chances are, if your home experiences average appreciation, you will pay a much higher effective APR than if you use traditional financing.



  • Minimum credit score requirement of just 500, making it easy for most to qualify
  • Maximum loan amount of 43.75% of your home’s value (capped at $500,000)
  • Unlock will offer investments on non-owner occupied properties (rentals)
  • Unlock does not share in the added value of improvements
  • They don’t apply a risk adjustment (discount) to the appraised value of your home


  • Unlock typically doesn’t offer 30 year terms, just 10 year terms
  • They are only available in 15 states
  • Unlock does not invest in properties co-owned by other investors, raw land, co-ops, or prefabricated homes



  • You are allowed to rent out your home during the term of your agreement with Point
  • You can pay off the investment from Point at any time
  • Point’s share of the appreciation of your home is only 30%


  • High risk adjustment of 15-20%
  • Variable processing fee of 3-5%
  • Point is only available in 17 states and the District of Columbia



  • You can pay Hometap off at any time throughout the term of your agreement
  • Maximum investment amount of $600,000
  • Allows you to access up to 30% of your home’s value


  • Hometap doesn’t offer 30-year investment terms, they only offer 10-year terms.
  • Only available in 18 states
  • They’re not very transparent about their risk adjustment rates

To get a better understanding of the costs and future scenarios, try out our ADU Equity Share Calculator.

How Does a Home Equity Investment Compare to a Home Equity Loan or Line of Credit

As we mentioned before, home equity investments and home equity loans/lines of credit are very different.  Two key areas where they differ are interest rates, and how you qualify for the loan.

Interest Rates

Unlike home equity loans, lines of credit, and other forms of traditional financing, home equity investments don’t require you to make a monthly payment or even pay interest.  You simply cut a check for the lender's share of your home’s appreciation at the end of the term.


Unlike traditional means of financing, home equity investments are based on the value of your property, not so much on you or your credit score.  This means that a home equity investment might be a better option for you if you have less than stellar credit, or just want to steer clear of traditional financing routes.

Frequently Asked Questions

We know we just threw a lot of information at you, and you’ve probably still got some questions.  Below we’ve answered some of the most frequently asked questions about home equity investments to help provide a little more clarity.

What is risk adjustment?

Risk adjustment is the amount that is discounted from your home’s appraised value.  It is used to provide the investor a cushion for uncertainty around the appraisal and future unforeseen market conditions.  This figure is typically represented as a percentage.

What is the max draw/investment amount?

The maximum draw/investment amount is the maximum amount of money that the home equity investment lender will invest in your property.  This is based on a variety of things, such as the amount of equity you have in your home, the value of your home, and the lender's own lending requirements.

What companies share in home improvements?

Point, Hometap and Noah all offer home equity sharing agreements where they share in the increase in your home equity after you complete renovations/improvements.

What is the share amount?

The share amount is the percentage of equity that the lender is purchasing upfront.  This is determined by the amount of money you are borrowing as well as the appraised price of your home, and any risk adjustments used by the lender.

What’s the difference between Home property share vs appreciation share?

The home property share is the amount of money that you borrow from the lender, this is a fixed amount of money that is typically the minimum amount that is required to be paid back to the lender upon the termination of your agreement.

The appreciation share is the amount of additional funds that need to be paid to the lender upon the termination of your agreement.  This is determined by the lender's cost basis/equity in your home, as well as the sale price of your home.

Do I qualify for a home equity investment?

So long as the amount of money you’re looking to borrow fits within a lenders LTV requirements, there’s a good chance that you qualify for a home equity investment.  Since the lender is lending on the asset (your home) and not your personal financials, debt-to-income ratio guidelines are typically more flexible than traditional financing.  However, the best way to find out whether or not you qualify is to reach out to a lender.

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