Shared equity products (SEPs)—often referred to as home equity sharing agreements, home equity agreements, or home equity investments—have significantly increased in volume over the past several years. A homeowner using these products receives an up-front cash payment in exchange for giving an investor a share in their property’s future value. Although SEPs are primarily used for home equity extraction, they have very different terms and requirements from traditional mortgage products used for that purpose. Instead of paying the investor back with regular monthly payments, a homeowner using an SEP pays a lump sum when the contract terminates. SEPs can be more accessible to homeowners with low credit scores or tight monthly finances who may be unable to qualify or keep up payments on an equity-extraction mortgage. But SEPs’ unique structure also makes them difficult to regulate with existing mortgage rules. With the increased use of SEPs, it is important for policymakers to understand the role these instruments can play, the characteristics of homeowners who use them, the mechanics that determine homeowner costs and investor returns, and how regulation should be tailored to this product’s unique structure.

What We Found

• SEPs are an equity-extraction tool for homeowners. The primary use of the proceeds was to pay down debt; the secondary use was for home improvement or savings. SEPs are rarely used as a home purchase tool.
• Homeowners using SEPs include those who cannot use mortgage products to access their home equity because they have low credit scores or income challenges, as well as those who want to minimize monthly payments while still tapping into their home equity.
• The homeowner profile for those who use SEPs is very similar to those who use other equity-extraction products in terms of age, income, and amount of equity extracted.
• All SEPs give homeowners an up-front payment in exchange for a stake in their home value, but the product terms and structure differ across originators.
• Because SEPs are so different from mortgage loans, they are fundamentally incompatible with many mortgage loan regulations. For example, there is no interest rate to disclose, and there is no loan balance or amortization schedule to disclose. We make suggestions for a regulatory framework tailored to this product.

How We Did It

The three largest SEP providers (i.e., Point, Hometap, and Unlock) have formed a trade association, the Coalition for Home Equity Partnership. The founding members gave us data on the approximately 54,000 mortgages they originated between 2015 and mid-2025. We analyzed these data and compared them with Home Mortgage Disclosure Act data for mortgage loan–based equity-extraction options. In particular, we compared SEPs with cash-out refinances, home improvement loans, and home equity lines of credit.