Global investment firm Carlyle has agreed to purchase up to $300 million of equity sharing home loans from home equity solutions provider Unison. Carlyle also made a strategic investment into the San Francisco-based Unison, enabling it to launch its Equity Sharing Home Loan product.
“We are excited to partner with Unison to provide an attractive solution for homeowners to access their appreciating home equity,” Akhil Bansal, Carlyle’s head of credit strategic solutions, said in a statement.
The product, which rolled out on Tuesday, combines the features of traditional mortgage financing and emerging home equity investment (HEI) options.
Unison’s Equity Sharing Home Loan is a second mortgage with a below-market interest rate. It allows homeowners to tap into their equity without refinancing their existing mortgage, and like other HEI products, it also allows them to make use of the potential appreciation of their home.
“Our collaboration with Carlyle enables the Unison Equity Sharing Home Loan to turn dormant home equity into an active tool for financial empowerment for millions of Americans,” Thomas Sponholtz, founder and CEO of Unison, said in a statement.
Unison has more than $1.8 billion in assets under management and has helped more than 12,000 homeowners tap into their equity, according to Carlyle.
Compared to the $2 trillion value of the traditional mortgage market, home equity investments are quite small. Dan Burnett, head of investor product at Hometap, told HousingWire earlier this year that he estimated the investment volume from players in the HEI market to be between $2 billion and $3 billion per year.
Once at the fringes of housing finance, home equity investment companies — including Unlock, Point, Splitero and Aspire — have been looking to grow their stake.
As of second-quarter 2024, U.S. homeowners have $11.5 trillion in tappable home equity, which refers to the amount of equity they can access while maintaining a 20% equity cushion, according to ICE Mortgage Technology.
