What Is a Home Equity Agreement (HEA)? (2026)

A home equity agreement (HEA) lets you turn part of your home’s equity into cash without borrowing. You receive a lump sum up front — often around 10% of your home’s value, though this varies by company — in exchange for giving an investment company a larger stake in your home’s future value, commonly two times what you received. There’s no interest rate, no monthly payment and no fixed repayment date.

Instead of making payments, you settle the agreement — by selling the home, refinancing or buying out the investor’s stake — usually within 10 to 30 years. That structure makes HEAs appealing to homeowners who can’t qualify for a traditional loan or don’t want another monthly bill, but it also means you’re giving up a slice of your home’s future appreciation, which can cost far more than loan interest in a rising market.

How does a home equity agreement work?

The mechanics are consistent across providers, even though the branding varies:

1. You get a lump sum. The company invests a percentage of your home’s current appraised value — typically 10% to 20%, with provider caps ranging from about $250,000 to $600,000.
2. The company takes a stake in your home’s future value. In exchange, the company is entitled to a share of your home’s value when you settle, commonly around two times the percentage you received. Some providers take a share of your home’s total future value; others take a share of only the appreciation from an agreed starting point.
3. Your starting value may be discounted. Some companies discount your home’s starting value below its appraised value before calculating their stake, per the CFPB. For example, a company might set your starting value 25% below the appraisal, which increases the company’s share of any appreciation from that lower baseline.
4. You settle by the end of the term. Terms typically run 10 to 30 years. You settle by selling the home, refinancing, or buying out the company’s stake with savings or a new loan. The company places a lien on your property until you do.

Because an HEA isn’t a loan, it doesn’t show up as debt on your credit report and doesn’t affect your debt-to-income ratio — part of why it appeals to homeowners with irregular income, high existing debt or lower credit scores.

HEA vs HEI vs HESA: is there a difference?

No. A home equity agreement (HEA), a home equity investment (HEI) and a home equity sharing agreement (HESA) are the same product. Companies simply use different branding — some call themselves investment platforms and use “HEI,” others use the more contract-sounding “HEA.” If you see any of these three terms, assume the mechanics are the same: cash now for a share of your home’s future value later.

How an HEA compares to a HELOC and home equity loan

A home equity line of credit (HELOC) and a home equity loan are both loans — you borrow against your equity and pay it back with interest. An HEA is fundamentally different: you’re not borrowing at all.

Feature	HELOC	Home equity loan	HEA / HEI
Is it a loan?	Yes	Yes	No — an equity-sharing agreement
How you get funds	Draw as needed, up to a credit limit	One lump sum	One lump sum
Interest rate	Variable	Usually fixed	None — you pay in home value instead
Monthly payments	Yes, once you draw funds	Yes, from day one	None until the agreement ends
How it’s repaid	Principal and interest during repayment period	Fixed monthly payments over the loan term	A lump sum tied to your home’s value when you sell, refinance or buy out the contract
Typical term	10-year draw period plus a repayment period	5 to 30 years	10 to 30 years
Credit needed	Good to excellent	Good to excellent	More flexible — built for weaker credit or inconsistent income
Risk if you can’t pay	Foreclosure	Foreclosure	No missed-payment risk, but you could owe far more than you received if your home appreciates a lot

The split that actually matters comes down to one question: are you borrowing money or selling a piece of your home’s future? With a HELOC or home equity loan, you keep 100% of your home’s future appreciation — you just owe interest on what you borrowed. With an HEA, you give up a portion of that future appreciation in exchange for avoiding monthly payments and an interest rate.

What does a home equity agreement cost?

An HEA has no interest rate, but that doesn’t make it cheap. You repay the original amount plus the company’s share of your home’s change in value, calculated when you settle — and most providers also charge an origination or processing fee of roughly 3% to 4.9%, deducted from your funding at closing, plus appraisal, title and government filing costs.

In a 2025 analysis, the CFPB modeled a $50,000 HEA against a $50,000 HELOC at 9% interest over 10 years. The HELOC cost $95,000 total in that example. The HEA cost between $94,000 and $216,000 depending on how much the home appreciated — cheaper only if the home lost value, and roughly double the HELOC’s cost under strong appreciation.

There’s no single “cheapest” option. The right comparison depends on your home’s expected appreciation, how long you plan to stay and whether you can qualify for and manage loan payments.

Pros and cons of a home equity agreement

Are home equity agreements regulated?

HELOCs and home equity loans are mortgages, so they fall under standard federal mortgage lending rules. HEAs are in a gray area — and that’s changing fast:

• The CFPB published a report in January 2025 detailing the high costs and non-standardized disclosures in these agreements, and separately argued in a court filing that some of these products should be treated as mortgages under the Truth in Lending Act — a position the industry disputes.
• Connecticut, Maryland, Illinois and Maine have since passed laws treating HEA agreements as consumer credit or mortgage loans, with licensing and disclosure requirements.
• Colorado’s attorney general reached a 2026 settlement requiring a major provider to treat its agreements as regulated consumer credit.
• Many other states still have no specific statute, so your protections come mainly from the contract itself.

Rules vary by state and are changing quickly. Check your state attorney general’s or banking regulator’s site for the current requirements before signing an HEA.

How to qualify for a home equity agreement

Requirements vary by company, but most look at:

• Credit score. Minimums range from about 500 to 660 depending on the provider — well below typical HELOC requirements.
• Equity. Most require you to retain at least 20% to 25% equity after the investment.
• Property type. All major companies accept single-family primary residences; coverage of condos, townhomes, rentals and multifamily varies.
• State. Availability is limited — check each provider’s site for your state.
• Income. Most HEA companies have no income or DTI requirements.

How do you settle a home equity agreement?

• Sell your home. The most common exit. At closing, the company receives its share of the sale proceeds.
• Buy out the company’s share. At any point during the term, you can pay out the company based on your home’s current appraised value — funded with savings, a new loan or a cash-out refinance.
• Refinance your mortgage. Some homeowners use a refinance to pay out the HEA at the same time. Not all lenders will refinance with a second lien in place, so confirm before you proceed.
• The term expires. This is the scenario to plan around. Most companies will work with you on a resolution, but your contract may give the provider the right to seek a court-ordered sale of the property. Never enter an HEA without a clear exit strategy.

Who offers home equity agreements?

HEAs aren’t a product traditional banks offer — they come from a smaller group of specialized equity-investment companies, including Point, Hometap, Unlock, Unison and Splitero. Compare the major providers side by side in our guide to the best home equity investment companies.

Alternatives to a home equity agreement

• HELOC. A revolving credit line tied to your equity — generally a lower total cost if your home appreciates significantly and you can manage the payments.
• Home equity loan. A fixed lump sum with a fixed rate and predictable monthly payments, typically cheaper than an HEA in an appreciating market.
• Cash-out refinance. Replaces your mortgage with a larger one and gives you the difference in cash — can make sense if today’s rates are close to or below what you’re paying now.
• Personal loan. Unsecured, so your home isn’t collateral, but amounts are usually smaller and rates higher.
• Reverse mortgage. For homeowners 62 and older — converts equity to cash without monthly payments, but reduces what you or your heirs keep from the home’s sale.

Compare HELOC and home equity loan rates as alternatives to an HEA

Use our tool to see estimated rates from top lenders based on your location and financial details. Select whether you’re looking for a home equity loan, HELOC or cash-out refinance. Enter your ZIP code, credit score and information about your current home to see your personalized rates.

Frequently asked questions

• Is an HEA the same as a HELOC?

  No. A HELOC is a loan with interest and required payments. An HEA isn't a loan — you receive cash for a share of your home's future value instead.

• Can I have a HELOC and an HEA at the same time?

  Sometimes, but many HEA companies require their lien to be in a specific position, and existing lenders may restrict adding a new lien. Check with both companies before assuming you can combine them.

• Is HEA money taxable?

  The lump sum is generally structured as an equity transaction rather than income, but treatment depends on your state and how the transaction is structured. Talk with a tax professional before assuming it's tax-free.

• Do HEAs require good credit?

  No. HEA companies typically focus more on your home's value and equity than your credit score or income, which is part of why they appeal to homeowners who don't qualify for a traditional loan. Minimum scores range from about 500 to 660.

• What happens if I don't sell my home before my HEA term ends?

  Most agreements require settlement by the end of the term — commonly 10 to 30 years — typically through a buyout, refinance or forced sale if you haven't settled another way. Check your specific contract's end-of-term terms before signing.

• Which is cheaper: an HEA or a HELOC?

  It depends entirely on how much your home appreciates and how long you keep the agreement. A HELOC is often cheaper if your home appreciates a lot and you can manage the payments. An HEA can cost less if appreciation is modest or your home loses value.