HomePace will match your down payment in exchange for a share of your home’s future change in value. We help you reach 20%+ down, and may help you lower your monthly payment. We get paid from the proceeds when your home sells.
How it works for homebuyers
See how HomePace and a homebuyer share the change in value* of a home in two scenarios
*HomePace and the homeowner’s percentage share assume HomePace invests half of the 20% down payment at the start of contract (10% of the starting value of the home).
HomePace shares losses up to its initial investment. The above characteristics are presented solely for illustrative purposes, and do not represent the actual characteristics of any investment in an actual client account. There is no guarantee that any client’s account will have the same characteristics as those set forth above. Contract terms and outcomes may vary based on your personal financial situation, interest rates, market performance, and other factors.
How do I compare HomePace to Mortgage Insurance?
Comparing debt and equity products can be a challenge. The best solution often comes down to your personal goals and financial situation. We can help you compare your options If you want to talk to someone to learn more, contact us here.
Private Mortgage Insurance (PMI)
Mortgage insurance is a type of insurance that a borrower might be required to buy as a condition of a mortgage loan. Most lenders require PMI when a homebuyer makes a down payment of less than 20% of the home’s purchase price. PMI can add anywhere between 0.5%-2.00% to your interest rate which increases your monthly payment.
Borrower-paid mortgage insurance typically has a higher rate at first, but it will automatically drop off once you’ve paid off 22% of the value of your loan. This can take about 10 years. Lender-paid mortgage insurance typically adds less to your interest rate, but it does not fall off over time – you will pay the increased rate through the life of your loan.
PMI increases your purchasing power by allowing you to put less money down. However, it comes with higher monthly payments over time.
Equity Co-investments (HomePace)
Using a HomePace co-investment increases your purchasing power, but it does so without the increase in monthly payments that come with PMI.
HomePace is an investor, and we invest funds into homes. We buy a portion of the equity in your home from you, giving you cash up front for your down payment. We are paid once you sell the home. We take the risk, alongside you, that we may lose money if the home doesn’t increase in value.
We are similar to a loan or debt product in that you get cash up front for your down payment, but you aren’t expected to make payments out of pocket, unless you wish to buy HomePace’s contract out before selling the home. We get paid when your house sells, and you get the benefit of more cash down and lower monthly mortgage payments.
HomePace is a complement to your mortgage, by allowing you to access capital in a different way. You increase your purchasing power, but keep your debts and monthly payments to more affordable levels.
For some people, the upfront cash allows you to avoid putting all of your savings into your down payment so you have cash on hand for other needs such as unexpected expenses, other financial goals like retirement, or paying for a college education.
What happens if I want to live in my home for more than 15 years?
HomePace’s contracts extend for 15 years. If you do not wish to sell your home at the end of your contract, you have the option to buy out the contract. You would pay HomePace for our share of the home, based on the home’s current market value at that time.
In some cases, we may be able to re-engage in a second contract on your home, provided the home and the local real estate market continues to meet our investment criteria and the home has been well-maintained. We assess homes on a case-by-case basis. If you would like to consider this option, please contact us to discuss.
What if my home has lost value when I decide to sell?
As a co-investor with you in your home, HomePace will share in a portion of the losses in the home alongside you, as outlined in the contract.
You have the right to sell your home when you decide to, regardless of its change in value. We recognize that your primary residence is not just a financial investment for you – your needs from your home may change, sometimes unexpectedly, and we understand that needing to move doesn’t always coincide with rising prices.
In the unlikely event that HomePace’s share of the losses at the time of sale exceed the value of our initial investment (the upfront payment we give you), we will waive our right to our share of the home. This means you keep 100% of the proceeds of the sale of the home when it sells. If that happens, you have no obligation to repay us for the upfront funds we provided to you. Those funds are not a loan and are only repaid if the home sells with enough value to share between HomePace and you.
How do you calculate share percentages for HomePace and me?
Factors like the size of the upfront payment you are seeking from HomePace, your credit score, the amount of equity you have in your home, and the real estate market in your area may all determine how we calculate share ownership. The split is set before you sign the HomePace contract and does not change.
We do offer credits to homeowners if they make improvements to the home that positively impact the value of the home. Read our FAQ “What if I use the funds to remodel my home” for more information.
Contact our team at firstname.lastname@example.org to learn more about pricing and contract terms.