Hometap

Hometap: home equity investments as an alternative to traditional loans

Hometap is a Boston-based fintech company that began operating in 2017 with the stated goal of making homeownership more accessible and less stressful. Its main product is the home equity investment (HEI), an alternative to a mortgage loan that allows homeowners to access the equity built up in their home without selling it or refinancing.

How a home equity investment works

The homeowner receives an initial payment of up to $600,000, equivalent to a maximum of 27% of their home's value, in exchange for a percentage of the property's future value. During the ten-year term, no monthly or recurring payments are required. The company registers a lien on the property in the form of a mortgage or deed of trust to secure its interest.

The entire process can be completed within 30 to 45 days. Approval is based on a comprehensive assessment of the applicant's financial situation and does not require meeting income or employment requirements. The homeowner can settle the investment at any time within the ten-year term through a buyout, with no prepayment penalties, using savings, a refinance, or the sale of the home. If not settled at maturity, the HEI provider may exercise its right to acquire a percentage ownership stake in the property and work with the homeowner to sell it.

Common uses of the capital

The company notes that the funds can be used for any purpose. Among the uses it highlights are:

• Paying off debts, loans, or bills.
• Funding higher education, tuition, or student loans.
• Covering unexpected life events, moving, or family plans.
• Home repairs and renovations.
• Starting or growing a small business.
• Improving financial well-being during retirement.
• Diversifying a portfolio, including a down payment on an investment property, rental or second home, or investing in stocks, bonds, or other alternative assets.

Geographic coverage

Hometap makes home equity investments in the following states: Alabama, Arizona, California, Delaware, Florida, Georgia, Idaho, Indiana, Kentucky, Michigan, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Utah, Virginia, and Wisconsin. For homeowners outside these areas, the company offers a free Home Equity Dashboard that allows them to check their home's value and equity.

Support and resources for homeowners

The company's model includes a dedicated Investment Manager, customized home value estimates, and a simplified pre-qualification process. Once the investment is finalized, the homeowner retains access to financial resources and tools to make informed decisions. The company also offers an online quiz, the HEI Fit Quiz, which in about two minutes helps assess whether this product fits the applicant's profile, without requiring personal information.

Corporate structure and licenses

The Hometap group operates through Hometap Equity Partners, LLC and Hometap Homeownership Solutions, LLC, entities that can enter into home equity investments directly with consumers. Hometap Equity Partners, LLC operates under the Hometap brand with NMLS ID 2467867. Hometap Homeownership Solutions, LLC also operates as Hometap with NMLS ID 2819930. Hometap Real Estate Equity Partners, Inc. holds real estate brokerage licenses in certain states, including California DRE license number 02191883.

Company profile

Founded in 2017 and headquartered in Boston, Massachusetts, Hometap presents itself as a homeowner-focused company. The company states it has funded more than 25,000 homeowners and maintains a 4.9 out of 5 rating on Trustpilot. Its newsletter, What's on Tap, has more than 350,000 subscribers. The company also has an ambassador program and a customer testimonials section.

Headquarters and offices

Main office: 361 Newbury St, 5th Floor, Boston, MA 02115

Office 450: 361 Newbury St, Office 450, Boston, MA 02115