Hometap

At a Glance

Product type

• Home equity investment / “shared appreciation” agreement (not a traditional loan, but it does put a lien on your home).

How it works

• Hometap advances you cash now (typically up to 25–30% of your home’s value, capped at around $600,000, with minimums around $15,000).
• In exchange, it takes a minority share of your home’s future value using an “X-for-Y” tiered pricing model (e.g., you might give up a larger % of future value than the % of value you get in cash today).
• You have up to 10 years to settle the investment via sale, refinance, or a buy-back; there are no monthly payments during the term.

Availability

• As of 2025, Hometap is available in 17 jurisdictions: AZ, CA, FL, IN, MI, MN, MO, NV, NJ, NY, OH, PA, SC, UT, VA, WA, and Washington, DC.

Basic eligibility (varies, subject to change)

• Must own a single-family home or condo in a serviced state
• Need at least ~25% equity in the property
• Hometap says it doesn’t rely on a strict FICO cutoff, but third-party reviews suggest typical minimum scores in the ~550–600+ range and at least moderate credit history.

Fees & costs

• Hometap charges a one-time fee of about 3% of the investment amount, plus standard third-party closing costs (appraisal, title, recording, escrow, attorney, etc.).
• Your eventual payoff is based on a multiplier on your home’s future value, not just the cash you received, so the total cost can be significantly higher than a HELOC or home-equity loan if your home appreciates.

Scale & reputation

• Hometap has originated 10,000+ home-equity contracts totaling over $1 billion as of early 2024, and more recent securitization data puts total investments above $2 billion and 20,000+ homeowners served.
• On Trustpilot, Hometap holds a 4.8/5 TrustScore across ~5,800+ reviews, with many customers praising the reps and straightforward process.
• The Better Business Bureau lists Hometap as accredited with a “B” rating and a modest number of complaints, some citing closing delays or misunderstandings around costs.

Key risks

• Massachusetts Attorney General has sued Hometap, alleging its HEIs are effectively illegal reverse-mortgage loans with high implicit costs and deceptive marketing. The company denies the allegations, and litigation is ongoing.
• The CFPB and consumer advocates warn that home-equity contracts (including HEIs like Hometap’s) can be complex, expensive, and may pressure some homeowners into selling to cover large balloon payments.

How Hometap Works

At a high level, a Hometap Home Equity Investment looks like this:

1. Get an estimate online (no hard credit pull initially)
   • You enter your address, estimated home value, mortgage balance, and basic personal info.
   • Hometap checks whether your state and equity profile are eligible and gives a rough investment range.
2. Submit documents & appraisal
   • If you move forward, you’ll provide income and property documentation and authorize a valuation (desktop or full appraisal, depending on the case).
   • Hometap underwrites your scenario, typically over a few weeks; third-party reviews say many deals close in around 3–5 weeks when things go smoothly.
3. Sign and receive funds
   • At closing, Hometap wires your funds and records a lien (mortgage or deed of trust) against your home to secure its interest.
   • You can use the cash for almost any purpose (debt payoff, renovations, tuition, investments, etc.).
4. 10-year term with no monthly payments
   • For up to 10 years, you make no payments to Hometap; you keep paying your existing mortgage, taxes, insurance, and maintenance as usual.
5. Settling the investment
   You can settle in several ways anytime during the term: If you haven’t settled by the end of the 10-year term, Hometap can exercise rights tied to a partial ownership interest and work with you to sell the property, or otherwise force settlement under the contract’s terms.
   • Sell the home: part of the sale proceeds repay Hometap’s share.
   • Refinance or HELOC: if you qualify, you can use new financing to buy out Hometap.
   • Cash repayment: pay Hometap’s settlement amount out of pocket.

Eligibility, States & Investment Limits

Where Hometap operates

Hometap currently invests in: Arizona, California, Florida, Indiana, Michigan, Minnesota, Missouri, Nevada, New Jersey, New York, Ohio, Pennsylvania, South Carolina, Utah, Virginia, Washington, DC, and Washington state.

Availability can change, so always check Hometap’s site for the latest coverage.

Property & borrower basics

While Hometap emphasizes that eligibility criteria can change, current disclosures and independent reviews suggest:

• Property type:
  • Primary residences and some second homes/investment properties (typically single-family homes and condos).
  • No investments in properties held in LLCs or irrevocable trusts.
• Equity requirement:
  • At least 25% equity in the home is generally required.
• Investment size:
  • Minimum investment is around $15,000.
  • Maximum $600,000, usually no more than 25–30% of your home’s current value.
• Credit & income:
  • Hometap markets itself as more flexible than banks and says it does not rely on a strict FICO cutoff.
  • Third-party sources report practical minimums around 550–600+ credit score, with reasonable debt obligations.

Pricing, Fees & How Much Hometap Really Costs

One-time fee and closing costs

• Hometap charges a 3% fee on the investment amount to cover its administrative and management costs.
• You also pay standard third-party closing costs (appraisal, title, government recording, escrow, attorney/notary). These are often rolled into the investment and deducted from the cash you receive at closing.

“X-for-Y” share of home value pricing

Hometap’s contracts use a tiered “X-for-Y” model:

• You get X% of your home’s current value in cash now.
• Hometap receives Y% of your home’s future value at settlement.
• Y is typically larger than X, meaning your effective “cost” is more than the cash you receive, even if the home doesn’t skyrocket in price.

The Consumer Financial Protection Bureau (CFPB) has analyzed similar home-equity contracts and found that in real-world examples, a homeowner receiving $50,000 could owe tens of thousands more than that amount in just a few years – and far more over a 10-year term – especially when home prices rise.

In plain English:

If your home appreciates, your Hometap payoff can be dramatically larger than the cash you got, plus the 3% fee and closing costs.

This trade-off might still be worth it if:

• You can’t qualify for or don’t want a HELOC/home-equity loan, and
• The cash solves a real problem (high-interest debt, critical repairs, etc.).

But you should absolutely model best-case and worst-case scenarios, ideally with help from a financial professional.

Hometap vs. HELOC vs. Home-Equity Loan

HELOC (Home-Equity Line of Credit)

• Revolving credit line with a variable interest rate
• Monthly payments (often interest-only at first, then principal + interest)
• Usually cheaper overall if you can handle payments and qualify
• More standardized disclosures and regulatory framework

Home-equity loan / cash-out refi

• Lump-sum loan with fixed rate & fixed monthly payments
• Good when you know the exact amount you need and want predictable payments
• Typically requires stronger credit and debt-to-income ratios

Hometap (Home equity investment)

• No monthly payments; repayment is a one-time balloon
• Cost is tied to your home’s future value, with pricing multipliers
• May be accessible when a HELOC or loan isn’t
• Less standardized; currently under evolving state and federal scrutiny

Big picture:

• If you can qualify for a low-rate HELOC or home-equity loan and can handle the payments, those options are usually cheaper and more predictable.
• Hometap may make sense if monthly payments are a non-starter, you have considerable equity, and you fully understand (and accept) the trade-off of giving up future home value for flexibility today.

Who Is It Best For?

Is Hometap legitimate?

Yes: Hometap is a real, licensed company (NMLS #2467867) that has funded a large volume of transactions and is widely reviewed online.

That said, “legit” doesn’t automatically mean “low-risk” or “right for you.” The ongoing Massachusetts lawsuit and CFPB’s broader warnings about home-equity contracts show that this entire category is under the microscope and that consumer protections are still evolving.

Hometap is best for:

• Equity-rich homeowners who can’t or don’t want to take on debt
• People who urgently need cash (e.g., to pay off high-interest debt, fund major repairs, or handle life events) and value no monthly payments more than maximizing long-term home value
• Homeowners are already planning to sell within the next decade, where a future sale was likely anyway

You should probably avoid Hometap if:

• You can qualify for a good HELOC or home-equity loan, and you can handle the payments
• You expect your property to appreciate significantly and want to keep as much future equity as possible
• You’re older, on a fixed income, or very attached to staying in your home long-term without taking on the risk of a large balloon obligation

Bottom Line: Should You Use Hometap?

Hometap’s home-equity investment can be a lifeline or an expensive mistake, depending on your situation and how carefully you evaluate the contract.

It’s most appropriate when:

• You’ve done side-by-side math against HELOCs, home-equity loans, and downsizing,
• You understand that you’re selling a chunk of your future home value, and
• The cash you receive meaningfully improves your financial trajectory (for example, wiping out toxic high-interest debt or funding high-ROI renovations).

Before signing, it’s wise to:

• Get at least one competing quote from a traditional lender,
• Run multiple scenarios for future home values and settlement amounts, and
• Consider speaking with a HUD-approved housing counselor, financial planner, or attorney who understands home-equity contracts.

Used thoughtfully, Hometap can offer powerful flexibility. Used casually, it can quietly eat away at one of your biggest wealth-building assets, your home.