"...Enter private credit and Carlyle. Unison had some success bundling its equity-sharing agreements into structured products — it recently got a credit rating on the tranches created. But the pure equity product by definition comes with erratic cash flows that made it tricky to securitise.

And so Unison wondered if it could merge housing debt and housing equity into a single product. It has, as a result, created the “equity-sharing loan” that resembles a corporate convertible bond with its fixed obligation attached to a call option."

<a href="https://www.ft.com/content/ca1b67a0-c95f-40f3-8dd1-ca6a583a14c6">Read the full article here.</a>

Private Credit's Latest Contraption

Home equity solutions provider Unison launched a new product on Tuesday that combines the features of traditional mortgage financing and emerging home equity investment (HEI) options.

<a href="https://www.housingwire.com/articles/unison-launches-hybrid-home-equity-sharing-loan/">Read the full article here.</a>

Home equity solutions provider Unison launched a new product that combines the features of traditional mortgage financing and emerging home equity investment (HEI) options.

Unison unveils ‘hybrid’ home equity sharing loan

Residential equity agreement firm Unison announced a $443 million securitization that it claims is the largest bond issue of its kind, opening the door for greater investor involvement.

 <a href="https://www.nationalmortgagenews.com/news/unison-issues-443-million-residential-equity-agreement-securitization" target="new">Read the full article here</a>.

National Mortgage News | Unison issues $443 million residential equity agreement securitization

The company hired one-time PayPal and eBay executive Ryan Downs as president, Silicon Valley Bank veteran Scott Case as chief financial officer and Joe Celentano from Wells Fargo Securities as global head of markets. Unison said Monday that it closed on a $443 million securitization, the largest such financing backed by the company’s residential equity agreements.

 <a href="https://www.bizjournals.com/sanfrancisco/news/2022/02/07/s-f-fintech-unison-makes-key-c-suite-hires.html" target="new">Read the full article here</a>.

SF Business Times | S.F. fintech Unison makes trio of key C-suite hires and secures its $443 million residential equity agreement securitization

Home-equity investment pioneer Unison closed a $443 million residential equity agreement securitization
Unison recently completed a $443 million private-label offering backed by an emerging class of home-equity assets in which investors and the homeowners share in both the upside and downside of a property’s value over time.

 <a href="https://www.housingwire.com/articles/home-equity-investment-pioneer-unison-taps-the-secondary-market/" target="new">Read the full article here</a>.

Housingwire | Unison taps the secondary market

Article originally found on Forbes.com 

When Damien Vrana and his wife, who wed last year, began looking for a house in New Jersey, their lender suggested a rather novel approach to financing. For the down payment, they could co-invest with Unison, a San Francisco-based real estate company. Vrana, who owns a small business that rehabs and readies homes for sale, liked the idea. 

 “As much money as I can reinvest back into my own business as opposed to tying it all up in a large down payment on a house just made a lot of sense to me,” he says. 

 “We can keep our money in our own possession, which allows us to potentially do other investments and grow that money, whether it's into my small business or other possibilities as the years go by,” says Vrana, adding that the family has already undertaken a basement renovation. 

 <a href="https://www.forbes.com/sites/dimawilliams/2020/02/23/moving-past-the-mortgage-how-startups-are-shifting-home-financing-from-debt-to-equity/?sh=566c8d403cd1/" target="new">Read the full article here</a>.

022420 blog

How Startups Are Shifting From Debt To Equity | Forbes | Unison

<h3>Startups backed by deep-pocketed investors are looking at a new way to profit from rising home prices</h3> 

Some well-funded startups have an unusual pitch for homeowners strapped for cash: Let’s own this house together. 

A handful of companies, including those backed by marquee Silicon Valley names such as Andreessen Horowitz and Mark Zuckerberg’s philanthropic organization, are experimenting with a product that essentially lets them take an ownership position in a house along with the homeowner. The agreements, called shared-equity contracts, provide a new way for investors to get exposure to rising home prices across the U.S. 

<a href="https://www.wsj.com/articles/silicon-valley-explores-a-new-investment-your-home-1518955201" target="new">Read entire article</a>.

010622 6 blog

WSJ | Silicon Valley Explores A New Investment, Your Home | Unison Home Co-Investing

In prior generations, buying a home was considered the chief symbol of the American Dream—and this dream was often aided by states and cities. However, due to factors like housing scarcity in major U.S. cities, many millennials have been excluded from this so-called American dream—San Francisco being the perfect example. The Bay Area has enjoyed a significant increase in jobs without the same growth in home inventory causing an even higher barrier to purchase a home. The Atlantic explores the impact of existing housing policies that were implemented decades ago, alongside proposed policies by younger generations, resulting in generational warfare. 

 <a href="https://www.theatlantic.com/technology/archive/2019/06/why-millennials-cant-afford-buy-house/591532/" target="_blank">Read the full article “Why Housing Policy Feels Like Generational Warfare” in The Atlantic which cites several key housing statistics provided by Unison’s Home Affordability report.</a>

091819 blog

Unison | The Atlantic

For those that couldn't quite afford the down payment in the big city of their choice, there used to be a fool-proof solution: rent until you can save for that elusive 20% down payment.

 However, the cost of living is exceeding the growth of wages and coupled with millennials' massive debt, the hurdles are immense.

As Unison's VP of Partner Channel, Ayesha Dillon states that home co-investing is more timely and relevant than ever."Over the last years, we've homed in on segments of the population, but we found that millennial buyers are coming out with student debt and have a harder time with the down payment, so they are a natural fit," Dillon said.

<a href="https://www.vice.com/en_us/article/gy4d5w/people-are-moving-to-smaller-cities-in-search-of-affordable-houses-that-dont-exist" target="new">Read the full Vice article here</a>.

100619 2 blog

Housing Finance Fintech Sees Soaring Growth As It Helps Americans Buy Homes

2018 was an exciting year at Unison. 

We expanded into new states, shared success stories featuring Unison HomeOwner customers and Unison HomeBuyer customers, announced our annual Home Affordability Report, released the results of a nationwide survey of home buyers, and attended conferences across the country. 

<img src="https://contentimages.o-prod.unison.com/images/press/Unison-covered-in-NYT-e1528238924411.jpg">

Now, we have another exciting milestone to share. This past week, Unison was mentioned in <a href="https://mobile.nytimes.com/2018/06/01/your-money/home-buying-shared-equity.html" target="new">a New York Times article</a> about the rise of shared equity programs for home buyers: 

<div>
<q>…a small but growing number of home buyers are trying something different: asking an outside investor to put down money alongside them… It is called shared equity, and Unison, a company based in San Francisco, is the largest of a handful of firms putting it to work.</q>
</div> 

<a href="https://mobile.nytimes.com/2018/06/01/your-money/home-buying-shared-equity.html" target="new">Click here to read the full story on The New York Times website</a>

010622 4 blog

Unison In The New York Times | Unison Home Co-Investing

Ozy, a news site "for the disruptive Change Generation" explores the phenomena of how long it takes to save for a 20% down payment across a variety of cities using Unison's annual Affordability Report.

 They look into the benefits of homeownership and the work Unison is doing to help potential homeowners get into the market. 

 <a href="https://www.ozy.com/acumen/where-saving-for-a-house-can-take-95-years/94924" target="new">Read the full article here</a>.

081219 blog

This Company Will Double Your Down Payment | Unison Home Co-Investing

Article originally found on MReport.com 

A new report by Unison forecasts that it will take two years for home prices to recover from the effects of COVID-19. 

 Unison gave numerous reasons as to why the industry is in a better position to survive an economic depression when compared to the Great Recession more than a decade ago. The report said the industry is more prepared due to the current presence of more government support available to aid homeowners in particular versus in the past. 

 <a href="https://themreport.com/daily-dose/04-14-2020/report-home-prices-to-take-2-years-to-recover" target="new">Read the full article here</a>.

060120 blog

How Long Could Home Prices Take To Recover? | Unison

<img src="https://d3jkudlc7u70kh.cloudfront.net/top-10-largest-cities-in-america.jpg"> 

Article originally found on Money.com 

A buyer looking to make a smart long-term bet in today’s volatile housing market should follow the jobs, according to a new report. That may mean avoiding cities too heavily reliant on a single industry for jobs and seeking out those with more diversified economies. 

 The research, from Unison, a San Francisco-company that co-invests with homeowners in 30 states, contends owner-occupied housing will recover slowest in areas with heavy job losses. The most vulnerable of the 20 cities analyzed? Las Vegas, Miami and Detroit because employment in those places is heavily concentrated in one or two hard-hit industries. 

 “Wages drive home prices. More people making more money means more demand for homes,” says Unison Chief Executive Thomas Sponholtz. “You have to ask: ‘How diversified is the demand side for housing in a certain market?” 

 <a href="https://money.com/coronavirus-housing-market-cities/?xid=moneyrss" target="new">Read the full article here</a>.

063020 blog

3 Cities Where Coronavirus Could Hit Housing the Hardest | Unison

From the Los Angeles Times 

When Ricardo and Catherine Soto were looking to buy a home in Chula Vista, they knew that even after selling their old house in El Cajon they would be able to afford a down payment of only about 10%. 

But when buying a home, 20% is the magic number. It means not only borrowing less but also avoiding mortgage insurance, which can cost hundreds of dollars a month.

<img style="max-width:80%;height:auto;" src="https://contentimages.o-prod.unison.com/images/press/Neighborhood.jpg">

Some cash-strapped home buyers might have opted to tap a relative or retirement savings, but the Sotos tried something new. When they bought their home for $650,000 in September, the couple came up with the 20% after all — thanks to an unusual arrangement with a newcomer to the mass mortgage market. 

Unison, a 12-year-old San Francisco company, offered to match the $65,000 that the Sotos brought to the table in exchange for what amounts to an ownership stake in their house. 

The Sotos don’t have to pay anything back — not for a while, at least. But when the couple sell their house they will owe Unison the $65,000 it invested, plus 35% of the value their home gains. Should the market suffer a setback, Unison will share in the loss. 

The company, formerly called FirstREX, is one of a handful of firms developing novel financial products aimed at helping buyers afford increasingly expensive homes now that the market has recovered from last decade’s housing bust. 

<a href="http://www.latimes.com/business/la-fi-home-equity-investments-20170106-story.html" target="new">Read the full article here</a>.

010622 blog

From USA Today 

If you have to a super-expensive housing market and you don’t have the accumulated down payment, shared appreciation mortgages offer an alternative. 

Lindsay and Trevor O’Keefe are early-30s parents to a growing family. In fact, just hours before Trevor was interviewed, Lindsay had given birth to their third child. Trevor sounded tired. Unsurprisingly, Lindsay didn’t come to the phone. 

<img style="max-width:80%;height:auto;" src="https://contentimages.o-prod.unison.com/images/press/First-Rex-now-unison.jpg">
 

Even before their family’s new addition, the O’Keefes were living in a yard-less condo and looking to move to a larger home. However, relying on one income — Trevor is a pastor at a suburban San Diego church — they were priced out of the city’s expensive real estate market. 

Then their lender suggested a third-party provider that would help them put more money down, borrow less and have a lower monthly payment. 

It sounded almost too good to be true. There is a catch, though. You generally give up more than a third of your home’s future value. 

<h3>Shared appreciation mortgages</h3>

The company the lender recommended was Unison, a home equity investor that offers “shared appreciation” mortgages. 

Companies like Unison — two others are Patch Homes and Point — allow homeowners to tap the equity in their homes without taking out a loan; the investment company takes a share of growth in the home’s future value instead. 

But the Unison Homebuyer program takes the idea a step further, by splitting down payments with homebuyers. 

“Shared appreciation mortgages have never really attracted that much attention,” says Anthony B. Sanders, professor of finance at George Mason University. However, a down-payment-assistance version of the strategy is likely to appeal most to jumbo mortgage borrowers, especially “if you have to go into a super-expensive housing market and you don’t have the accumulated down payment,” he says. 

“I think any time you first hear about an investment group who wants to help you out, you can be a little leery,” O’Keefe acknowledges. But he adds that Unison’s presentation made the couple aware of every aspect of the agreement. 

The deal also gave the O’Keefes the ability to have some money on hand to address maintenance issues in the aging house they wanted to purchase. 

<h3>How a shared appreciation mortgage works</h3>

Here’s how the Unison program works on a 20% down payment plan:
<ul>
<li>The company splits a 20% down payment with you. It’s an investment, not a loan. You make no payments to Unison until you sell the home, and the company has no ownership or occupancy rights.</li>
<li>Unison takes 35% of the future change in the home’s value.</li>
<li>A transaction fee, paid at loan closing, amounts to 2.5% of Unison’s investment. For example, if Unison is providing $50,000 — half of the 20% down payment on a $500,000 home — the fee would be $1,250.</li>
<li>You can buy back Unison’s interest before you sell.</li>
<li>Or, if you sell the home, you pay back Unison’s share of the down payment from the proceeds, as well as 35% of the home’s gain in value.</li>
<li>If you never move and eventually pay off the mortgage, you’ll still have to pay Unison’s share of appreciation, plus its portion of the down payment.</li>
<li>If the home doesn’t gain value, you simply pay back Unison’s share of the down payment.</li>
<li>If the home loses value, it’s deducted from the down payment reimbursement.</li>
 </ul>
If you remodel your home and it adds value to the property, a 100% adjustment of that value will be made at the end of the agreement. 

<a href="https://www.usatoday.com/story/money/personalfinance/2017/03/13/company-double-your-down-payment-whats-catch/98727302/" target="new">Read the full article here</a>.

010622 3 blog

This Company Will Help With A Down Payment | Unison Home Co-Investing

“Unison’s 2018 growth numbers point to a clear break from the debt-only status quo in residential real estate,” Thomas Sponholtz, Unison’s founder and CEO, said in a statement.

San Francisco-based Unison said it achieved triple-digit growth in revenue and doubled its employees in 2018 as the fintech gained traction in the marketplace.
Unison is among a crop of Bay Area companies eager to change how Americans buy, sell and finance homes.

<img src="https://contentimages.o-prod.unison.com/images/press/thomas-sponholtz-unison_750xx1920-1080-0-0.png">

Unison helps people buy houses by purchasing stakes of home equity. Some customers use the money for larger down payments, which can allow buyers to shop for pricier homes than they could otherwise. Others reduce the mortgage debt they take on when they buy a home. Long-time homeowners can use Unison to turn some of their home equity into cash.

Since Unison’s stake in a home represents equity and not debt, there is no monthly payment. Unison’s institutional investors putting up the money to buy all these stakes of home equity ultimately share in the upside or downside of changes in a home’s value. 

<a href="https://www.bizjournals.com/sanfrancisco/news/2019/02/12/residential-real-estate-unison-san-francisco-rbc.html" target="new">Read the full article from this San Francisco Business times here</a>.

010622 2 blog

From LowestRates.ca

<img src="https://contentimages.o-prod.unison.com/images/press/home.jpeg">
As home co-investing becomes more familiar with consumers, the idea is making its way up North. Canada-based LowestRates.ca dives deeper around Unison, the co-investment landscape and how it helps buyers get into homes with a smarter, better way. 

Read more <a href="https://www.lowestrates.ca/blog/homes/shared-equity-mortgages-are-they-good-idea" target="new">here</a>.

060519 blog

Shared equity mortgages are becoming big business. Are they a good idea?

The sharing economy has risen rapidly over the last few years, from ride share to co-working spaces. Brick Underground, a website The New York Times calls the "first step for New Yorkers getting ready to move" explores Unison's model thoroughly, chatting with a client, financial advisor and Unison itself. 

 Ayesha Dillon from Unison explains why it's such a great option for buyers looking to make a smarter financial decision around their home purchase, "We work with buyers who are looking for their primary home and could use our down payment cash to create flexibility with their home purchase, whether it's reserving cash for a rainy day or keeping their monthly payment low by not paying PMI."

<a href="https://www.brickunderground.com/buy/buying-with-co-investor-fintech-unison-nyc" target="new">Read the full Brick Underground article here</a>.

100619 blog

Buying in New York | Unison

From Reverse Mortgage Daily 

Nearly half of American homeowners, at 48%, say they plan to retire sometime in their 60s. An additional 9% plan to do so during their 50s, and 22% plan on their 70s. 5%, however, say they’ll never retire, and 11% don’t know if retirement is an option for them. These are the findings of a survey called <a href="https://www.unison.com/article/the_state_of_the_american_homeowner" target="new">“State of the American Homeowner,”</a> conducted by alternative equity tapping company Unison. 

 More than two-thirds (68%) of American homeowners express being either “confident” or “very confident” in the amount of assets they have saved to fund their retirements, by-and-large the numbers they report do not appear to support such optimism, according to Unison. 

<a href="https://reversemortgagedaily.com/2020/02/11/unison-senior-retirement-goals-unclear-savings-insufficient/" target="new">Read the full article here</a>.

020320 blog

Reverse Mortgage | Unison

<img src=https://contentimages.o-prod.unison.com/images/blog/Couple-on-bench.jpg>

From Yahoo! Finance 

Some Americans are pinning their retirement hopes on their homes, betting that housing appreciation will continue and compensate for their lack of savings. But experts warn that adults shouldn’t bank on houses as their only retirement investment – even if real estate appreciation continues. 

One in 4 U.S. homeowners plan to use their home to fund their retirement, according to a <a href="https://www.unison.com/article/the_state_of_the_american_homeowner" target="new">recent survey from Unison</a>, a home co-investing firm. Of those, 1 in 6 said their home represents half or more of their retirement nest egg. 

“If someone thinks their home is going to fund 100% of retirement, that’s a little scary, but I’m not surprised,” said James Ciprich, advisor at RegentAtlantic, a financial planning firm. “We have a retirement savings crisis.” 

<a href="https://money.yahoo.com/home-to-fund-retirement-165957826.html" target="new">Read the full article here</a>.

012020 blog

Homeowner's Big Retirement Mistake | Unison

The San Francisco-based firm, which currently manages US$1.3bn in residential equity agreements, priced its inaugural US$443m deal in December. The deal, on which Nomura and Barclays were joint bookrunners, is callable in 36 months.

 <a href="https://www.ifre.com/story/3241106/unison-eyes-up-to-three-home-equity-rmbs-in-2022-1dghryzjzg" target="new">Read the full article here</a>.

Related posts

Private Credit's Latest Contraption

Unison unveils ‘hybrid’ home equity sharing loan

Unison issues $443 million residential equity agreement securitization