Here's what you need to know

The Equity Sharing Home Loan is a 10-year interest-only second-mortgage loan that allows borrowers to access the equity in their home at a below-market interest rate in exchange for the right to receive a portion of your home’s future appreciation (if any). This loan also splits interest into ongoing interest that is paid monthly and deferred interest (which is also compounded), leading to lower monthly payments.

Unison equity sharing home loans are currently available in these states:

More states are on the way! Check back soon or let us know if you’d like to be contacted when your state is available.

We currently offer Equity Sharing Home Loans of up to $400,000 or 35% of the property value, subject to underwriting guidelines. The minimum loan amount is $30,000 (or $50,000 in certain states).

The below-market interest rates for the Equity Sharing Home Loan are enabled by the right to receive a portion of your home’s future appreciation (if any). This is known as shared appreciation and please read below for an explanation of how those mechanics work.

Note that interest rates displayed on the Unison website are estimates and subject to change. Unison’s determination that the Equity Sharing Home Loan’s interest rates are below market is based on an internal review and analysis as of August 2024 of interest rates for second-lien closed-end home equity loans.

In addition to offering below-market interest rates enabled by shared appreciation, the monthly payments on the Equity Sharing Home Loan are made even more affordable because the payments are interest-only, and a portion of the interest is deferred to the end of the loan term . The split is such that 25% is deferred, while 75% is due on a monthly basis.

The Equity Sharing Home Loan offers a below market interest rate, low monthly payments, and a 10-year term. It's a cost-effective alternative to traditional closed end home equity loans and HELOCs.

At the end of the loan, you will owe the principal amount borrowed, the agreed-upon percentage of the home’s appreciation, as well as deferred, compounded interest. Note that in case of an excessive amount of property appreciation, there is a shared appreciation percentage limit.

This structure is also known as “negative amortization.” It’s important to note that one consequence of negative amortization is that it could make it more difficult to refinance the loan or to obtain cash upon sale of the home.

As financially responsible homeowners, our goal is to offer you access to capital on below-market terms as flexibly as possible. As such, we offer you the option to prepay without penalty. You can make payments covering the full interest due each month, and if you so desire, you can even make payments covering some of the principal each month as well.

You can prepay at any time without penalty. If you go this route, you can prepay the interest and principal, and then when they are both paid in their entirety, the shared appreciation interest is due and will be calculated.

Unison’s share in your home's future appreciation is fixed at the beginning of the Equity Sharing Home Loan, and the amount is proportional to the amount of your Equity Sharing Home Loan. Unison's share is typically 1.5x the percentage you borrow. For example, if you borrow 10% of your home’s current value, Unison will receive 15% of the future appreciation. Note that with the Equity Sharing Home Loan, Unison does not share in any depreciation in your home’s value.

The shared appreciation interest is only due and calculated at the earliest of: the end of the loan’s 10-year term, when you sell your home, if you choose to prepay the loan in full (for example, if you decide to refinance), or if you default on the terms (for example, by not paying the monthly payments that are due).

The shared appreciation (if there has been any) is calculated by comparing your home’s starting value (called the Beginning Value) to the Ending Value, and applying the shared appreciation percentage (for example, 15%) to the difference in value. If you are eligible for and receive a Capital Improvement Adjustment or Deferred Maintenance Adjustment those would either decrease or increase the appreciation calculation.

To evaluate your property and to determine the Beginning Value, Unison will use an independent and licensed third-party appraiser.

An appraisal is a report from an independent qualified professional that estimates the value of a home. When you buy a home, you will usually hire an appraiser to visit the home, review its condition and characteristics, find comparable properties that have recently sold in the area, and provide both you and the seller of the home with a fair estimate of its value. At Unison, we require the same type of home appraisals to provide an accurate valuation for the Equity Sharing Home Loan.

To further ensure an unbiased valuation, we use independent and licensed Appraisal Management Companies (AMCs), who select the individual appraiser. AMCs are far-and-away the preferred means for obtaining appraisals in real estate transactions. They provide a “firewall” between financial institutions and appraisers, as required by federal guidelines.

The Ending Value for the purposes of determining the shared appreciation is determined either by an arms-length property sale or by appraisal in a process that is similar to how the Beginning Value is determined.

Although we both hope that your property appreciates, if its value increases excessively, we have a shared appreciation percentage limit set in place. The total interest payable under the Equity Sharing Home Loan, including ongoing interest, deferred interest, and shared appreciation interest, if any, will not exceed a predetermined percentage that is set in the agreement (at or below state interest rate limits).

It is also important to remember that with the Equity Sharing Home Loan, we share in only a portion the future appreciation of your home, not the equity you’ve already built.

We believe that if you make improvements to your home that boost its value (beyond regular maintenance), you should get all the benefits. That’s why we use a feature called a Capital Improvement Adjustment.

To qualify for a Capital Improvement Adjustment, you need to work with licensed contractors and fully document the project. Remember to save before and after photos of each renovation. We then use an independent third-party appraiser to determine how the work changed the value of your home, making sure you receive the benefits. Keep in mind that some renovations add more value than others, and some don’t add any new value at all. In addition, the Capital Improvement Adjustment is not available within the first three years of your loan term. Whenever you are thinking about a project it is always a good first step to reach out to our team.

The homeowners will be responsible for paying the appraisal fees. And if a second appraisal is requested, the party requesting the second appraisal will be responsible for the second appraisal fee.

During the term of your loan with Unison, you are required to maintain your property in good condition, subject to normal wear-and-tear. When shared appreciation is due and calculated, if it is determined that the property was not properly maintained, Unison may apply a Deferred Maintenance Adjustment. One or more appraisals, inspections, or repair estimates obtained from independent third-party providers may be used to determine the amount of the Deferred Maintenance Adjustment.

If you would like to refinance your first mortgage (for example, a rate refinance) or take out an additional loan after you enter the Equity Sharing Home Loan, Unison will consider subordinating to your new lender in some situations, subject to underwriting standards and investor approval.

However, as other lenders' guidelines are frequently changing and out of Unison’s hands, there’s no guarantee that such loans will be available or that the terms will be the same as if you did not have the Equity Sharing Home Loan on the title. In particular, lenders that make loans conforming to Fannie Mae/Freddie Mac guidelines may decline your application, as these guidelines do not allow subordinate financing that shares in equity or home appreciation. If you are considering refinancing your mortgage in the near future, you may wish to do so before taking out a Unison agreement.

But regardless, as discussed above, you can prepay your Equity Sharing Home Loan in full or in part at any time, including the shared appreciation interest, without any penalty.

You can sell your home at any time. (After all, it’s your home!) Whenever you choose to sell, to give Unison time to determine the Shared Appreciation Interest, you'll need to notify Unison 45 days prior to closing and send us copies of certain documents related to the sale -- such as listing agreement, purchase contract, counter offers, disclosures, etc. When the sale of your home closes, you will pay Unison the amount owed. But note that if the sale is not an arms-length transaction or if it is materially below fair market value, Unison reserves the right to obtain an appraisal to use that to determine the Ending Value.

The Equity Sharing Home Loan is most suited for financially responsible homeowners who take pride in their home, and who want to flexibly access home equity-based capital at a below market interest rate and with low monthly payments. These homeowners should understand that the Equity Sharing Home Loan is enabled by shared appreciation, and further made affordable by being interest-only and with partially deferred interest that is due at the end of the loan term. However, by providing low cost capital to financially responsible homeowners, it is our goal to enable them to do things like start a business, pay down higher interest debt, and more!

Currently, properties that are single family, town homes, and condos, that are owner-occupied, primary residences are eligible for a Equity Sharing Home Loan.

Eligibility criteria include a minimum FICO score of 680, a combined loan-to-value of no more than 70%, a maximum back-end debt-to-income of 40%, and a maximum loan amount as 35% of the property value. Other factors may be considered.

Please also note that currently the Equity Sharing Home Loan is only available as a second mortgage loan (or in some cases third mortgage loan) that is subordinate to your primary first mortgage loan.

You are responsible for third-party origination costs such as credit reports, appraisal, escrow, and recording fees. In addition, Unison charges a 3% origination fee. Your transaction specific costs will be provided to you via a Loan Estimate and Closing Disclosure. The third-party origination costs and origination fee are typically deducted from the loan proceeds during the closing process.