Loan Product Allows Buyers To Trade Future Equity For Down Payment Help

For buyers who just want a home, aren’t overly concerned about equity, and are having problems saving for a down payment, Unison Home Ownership Investors can be a solution.

Realtor.com reports that Unison offers a loan product that helps buyers with their down payments in exchange for a stake in the house. After 30 years, homeowners owe Unison the initial investment plus 35 percent of the increased property value. For instance, if the company lent $20,000 on a $200,000 home, and the price increased to $250,000, the owner would need to pay Unison the $20,000, plus $17,500 (35 percent of $50,000).

Unison’s clients are typically millennials with the jobs to afford the pricey mortgage payments in expensive cities like San Francisco and New York. But although cash is flowing in, they struggle to save up for those huge down payments and keep up with their student loan payments and exorbitant rents, Jim Riccitelli, co-CEO of Unison, says. Other fans of the program simply prefer to save for retirement rather than a home purchase.

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