About 14 million Americans are considered "equity rich," with at least 50 percent equity in their homes, per analysis from Attom Data. Some homeowners in need of cash are tapping this equity.
HomeOwner, an investor program from Unison, is one of many that allows homeowners to dip into their home's equity for an infusion of cash without taking on new debt by sharing ownership of their home with the company. Consumer advocates are "cautiously optimistic," Realtor.com reports, as such programs are new, and unstandardized. Further, the program is not a loan, and isn't subject to the same disclosure requirements as mortgage lenders. Some housing analysts feel that homeownership being "an all-or-nothing proposition,” is "problematic," fueling the optimism over programs like HomeOwner.
This may sound like a first-world problem, but as Lindsay’s example illustrates, all the equity in the world is worthless if it’s locked in an untouchable asset while medical bills, home improvement costs, and other expenses are mounting. And since home equity is usually most concentrated among those who’ve lived in their homes the longest, that’s often retirees - the people most in need of certain cash flow.