When you buy a home, there are usually a few repairs to pay for. Buyers who want to take on a real fixer-upper might be facing the prospect of many projects.
If this is the case for you, you may be considering an FHA 203(k) loan, also known as a mortgage rehab loan or Section 203(k) loan, which combines the financing for both the home’s purchase and remodeling or repairs into a single loan.
FHA 203(k) loans are one of several options to pay for home improvements. Among the others:
Selling a stake in your home: A new breed of financial technology firms is pitching American homeowners on a different way of tapping into home equity. If you’re sitting on a pile of it, these companies — including Haus, Hometap, Point and Unison — will buy a piece of your house. You repay the “co-investment” when you sell. One downside: This money comes at a higher cost than a mortgage or HELOC.
This article originally appeared on Bankrate. Read the full article here.
Multi-family residential properties are popular for their strong cash flows and attractive risk-adjusted returns over the long term. They are typically less complex than office space, retail, or hotels. Like multi-family properties decades ago, residential homes have evolved into viable and profitable assets. Common routes to the residential home market include direct purchases, single-family rental vehicles (SFRs), and residential mortgage-backed securities (RMBS).
However, these strategies are subject to prevailing interest rates. In addition, direct purchases and SFRs require sizable capital outlays to acquire and maintain the properties, making them difficult to scale.
Furthermore, none of these assets provide exposure to a relatively untapped asset class – residential home value growth in owner-occupied homes. Historical home values have proven resilient over the long term and even through decades of economic cycles, averaging 5.4 per cent growth annually since 1975. (Source: St Louis Fed.) Regarding tappable home equity – the amount homeowners can access while keeping at least 20 per cent equity in their homes – market value stood at approximately $10.3 trillion as of Q3 2022. (Source: Black Knight.) Even as that number fluctuates, this large pool of high-quality investible assets remains available.
Home equity investments (HEIs) represent an attractive alternative to traditional financing by enabling homeowners to share the gains in their home values with investors in exchange for upfront cash. HEIs should appeal to the large number of homeowners with good credit and quality homes who still may not meet the requirements for other financing options. With more flexible qualification criteria, HEIs enable more homeowners to tap into their equity. While homeowners do typically need significant home equity for an HEI – around 25 per cent – credit requirements for qualifying are usually less stringent. Although different HEI providers may vary, a typical investment amount is 30 per cent or less of the total home value.
This article originally appeared on Family Wealth Report. Read the full article here.
In the past year, we saw a rise in partnerships between financial service providers and fintech companies in their efforts to become a “one-stop shop” for their customers. In 2023, financial service providers will continue to partner with — and in some cases, acquire — fintech companies, not only to expand their value proposition for consumers but also to help offset the decrease in demand for some of the more traditional financial products (eg, cash-out refinances, loans, etc.) due to the current interest rates.
Additionally, many consumers strengthened their financial literacy during the pandemic. As they pay more attention to their finances amid rising inflation, consumers are doing more research, asking more informed questions, and thoughtfully weighing their options before making major financial decisions. Thus, fintech companies can gain consumers’ trust by increasing transparency, proactively addressing questions about their products and services, and becoming better educational resources. ~ Jonathan MacKinnon, VP of Business Development & Product Strategy atHometap.
This article originally appeared on Payments Next. Read the full article here.
To mark the 20th anniversary of the CFO and COO Forum New York, Private Funds CFO is proud to present our inaugural New Faces of Finance list. Designed to run alongside our list of the CFOs that have helped shape private equity, we wanted to look to the future and demonstrate how the private markets industry is embracing a younger, more diverse talent pool. Nominations came from far and wide, with the list decided based on three criteria:
Evidence of leadership and innovation;
The caliber of the firms they have worked with and any developments they were crucial in bringing about;
Whether they possess an ‘X factor’ that marks them out as a future leader in private funds finance.
Chief Financial Officer, Hometap
Since becoming Hometap’s CFO in July 2022, Wong “has already proven to be an invaluable asset to the company,” according to his peers. He held several senior roles at Forward Financing, which delivers fast funding to business owners and which aligns with Hometap’s mission to make homeownership less stressful and more accessible.
Philadelphia, PA—January 11, 2023—Today, the Business Intelligence Group named 11 executives, 55 companies, and 91 products as leaders and winners of the 2023 BIG Innovation Awards. This annual business awards program recognizes organizations, products, and people that are bringing new ideas to life in innovative ways.
“Innovation is the lifeforce for many organizations as the world and our culture continues to evolve,” said Maria Jimenez, chief nominations officer of the Business Intelligence Group. “We are honored to award these executives, companies and products the BIG Innovation award this year.”
Organizations from across the globe submitted their recent innovations for consideration in the BIG Innovation Awards. Nominations were judged by a select group of business leaders and executives who volunteered their time and expertise to score submissions.
This article originally appeared on Business Intelligence Group. Read the full article here.
Although the tech sector saw a decline in venture capital raises in 2022, several Boston startups were pulled in hundreds of millions of dollars for their innovative work across renewable energy, cryptocurrency and sustainable agriculture. With 2022 in the rearview mirror, Built In Boston is taking a look back at the largest funding rounds of 2022. Totaling more than $3.1 billion, these funding rounds will fuel the growth of the Boston tech scene in the coming year.
#7. Hometap: $245 million, January 26
Instead of a conventional home loan, Hometap allows homebuyers to receive debt-free cash by selling a percentage of their home’s equity to Hometap. This investment from Bain Capital and Group 1001’s Delaware Life Insurance Company, went toward Hometap’s third institutional asset investment fund, which fuels the alternative loan funding and gives investors a chance to invest in residential real estate.
This article originally appeared on Built in Bos. Read the full article here.
Who are you and what do you do? My name is Jeffrey Glass. I am the CEO and cofounder of Hometap Equity Partners. My job has five main requirements. My number one role is to ensure that we are capitalized to accomplish our mission of making homeownership less stressful and more accessible, as we have ambitious operating and deployment goals that can’t be accomplished unless we have the necessary capital. Secondly, I think of myself as a champion of company culture. Our culture centers around being a good owner of one’s work and a good neighbor to one another. I try to do all I can to ensure that our values are operationalized and practiced throughout our organization. Number three is that I work to ensure that we have a high caliber leadership team that functions well together, because talent attracts talent. Fourth, I seek to amplify and communicate our business strategy so that we all are working towards a common set of goals. And finally, I look to help with game-changing business development or sales opportunities that can make a major impact on the achievement of our strategy.
What problem does your product/service solve?
Tens of millions of American homeowners are house-rich and cash-poor. We seek to accomplish our mission of making homeownership less stressful and more accessible by offering these homeowners an alternative to debt. We provide qualified homeowners with capital today in exchange for a percentage of the future value of the home.
This debt-free cash allows homeowners to accomplish goals like making renovations, funding a child’s education, putting a down payment on a second home, starting a business, and handling other life expenses that were previously unattainable to them.
This article originally appeared on Geek Estate Blog. Read the full article here.
BOSTON, MASSACHUSETTS—January 11, 2023—Hometap, today announced that its Chief Executive Officer, Jeffrey Glass, has been named a winner in the 2023 BIG Innovation Awards presented by the Business Intelligence Group.
Glass co-founded Hometap in 2017 with a mission to make homeownership less stressful and more accessible — and to create a new asset class where homeowners could bring in an investor in a more consumer-friendly and seamless way than the loan process. He and his team have built Hometap’s platform from scratch to provide a data-driven, revolutionary solution, and scaled the company rapidly in the past few years, despite the challenges of both remote work and COVID-19. Hometap has maintained triple-digit revenue, contribution margin, and investment deployment growth for a fourth consecutive year in 2022.
“We started Hometap to invent debt-free financial options that make homeownership less stressful and more accessible,” said Glass. One of our core company values is to create solutions, and innovation is at the heart of everything we do, so it’s a particularly great honor to be recognized for this award.”
“Innovation is ‘business critical’ in today’s society,” said Maria Jimenez, chief operating officer of the Business Intelligence Group. “We are thrilled to be honoring Jeffrey Glass and Hometap as they are leading by example and improving the lives of so many.”
Organizations from across the globe submitted their recent innovations for consideration in the BIG Innovation Awards. Nominations were then judged by a select group of business leaders and executives who volunteer their time and expertise to score submissions.
Hometap is on a mission to make homeownership less stressful and more accessible. Our home equity investment product provides homeowners with a fast, simple, and straightforward way to access the equity in their home without taking out a loan or having to sell. By investing alongside homeowners, Hometap offers debt-free cash in exchange for a share of their home’s future value — all without any monthly payments or interest over the life of the investment. Through a combination of financial innovation and best-in-class customer service, Hometap enables people to get more from homeownership so they can get more from life. Learn more at hometap.com.
About Business Intelligence Group
The Business Intelligence Group was founded with the mission of recognizing true talent and superior performance in the business world. Unlike other industry award programs, these programs are judged by business executives having experience and knowledge. The organization’s proprietary and unique scoring system selectively measures performance across multiple business domains and then rewards those companies whose achievements stand above those of their peers.
Chief Operating Officer
Business Intelligence Group
+1 (909) 529-2737
With both inflation and interest rates hitting record highs in 2022, all American consumers were affected by the increases — but aspiring homebuyers and current homeowners were especially impacted. For the former, the soaring prices were discouraging developments that forced many of them to put their dreams of homeownership on hold indefinitely, while the latter saw all-time highs in equity that presented opportunities for them to reap the benefits of home appreciation by selling or finally putting renovation plans into motion.
While these factors will continue to play a pretty significant role in 2023, the year will also likely bring the rise of more solutions that help homeowners access funding without the stress of debt. Here’s a look ahead at what we think you can expect.
Homeownership Tenure Will Increase, Allowing Homeowners to Build More Equity
Though first-time buyers may still find themselves priced out of the market as interest stays high, current homeowners who opt to stay put and delay plans to move may have an advantage. While they wait out the rate hikes, they’ll earn more equity in their current home, put a dent in their principal, and experience home price appreciation. This might put them in a more favorable place to buy down the road.
As a byproduct of the reduced incentive to sell, homeowners are more likely to focus on and achieve other financial goals in the meantime, like paying down credit card debt, making much-needed renovations on their homes, or even starting a business.
Demand for Cash-Out Refinances Will Decrease
As inflation and interest rates increase, products like home equity loans and cash-out refinances that have fees, monthly payments, and/or interest attached are becoming increasingly less appealing to homeowners. And as a potential recession looms, homeowners are taking steps to minimize unnecessary spending and reduce their expenses in order to keep debt down in any way they can. We’ll likely see products that involve taking on debt decrease in popularity as a result.
To this end, consumers are expanding their search and considering alternative financing options that may have previously been quite unfamiliar. Among these solutions are home equity investments, which allow homeowners to access their equity without taking on monthly payments or interest. This is especially true when it comes to cash-out refinances, as the primary appeal of this solution is often to secure a better rate during low-interest periods; homeowners won’t want to run the risk of losing their current rate given recent hikes.
Small Business Owners Will Explore New Solutions for Funding
Not only are homeowners feeling the strain of rising interest rates; business owners are as well. While small businesses are booming, and poised to continue growing in 2023, financing products that cater to them — like business loans and credit cards — are rapidly becoming more expensive as a result of skyrocketing rates.
With consumers tightening their spending and potentially patronizing businesses less frequently in the past year or so, business owners will likely be looking for supplemental income to stay up and running during lulls. In addition, small business owners who are also homeowners have another source of start-up funding in the form of their homes. Home equity investments allow already cash-strapped business founders to access funding without the hassle of interest or monthly payments. And with the ability to use the money for whatever they’d like, the possibilities are virtually endless — from equipment or marketing to working capital.
If you’re a homeowner who wants to make the most of your growing equity, take our five-minute quiz to see if a Hometap Investment might make sense for you.
YOU SHOULD KNOW… The above information is for general awareness and education purposes only, and does not pertain specifically to the homeowners insurance needs of those seeking a Hometap Investment. We do our best to make sure that the information in this post is as accurate as possible as of the date it is published, but things change quickly sometimes. Hometap does not endorse or monitor any linked websites. Individual situations differ, so consult your own finance, tax or legal professional to determine what makes sense for you.
Best advice for businesses to determine the amount of funding they will need
“When launching a business, estimating your start-up costs is equally as important as projecting your cash flow. These costs should include both one-time expenses, like incorporating your business, and ongoing costs, like utilities. You’ll also want to consider essential expenses (e.g., employee salaries) versus optional ones (e.g., graphic design or writing services). Once you’ve determined your start-up costs, calculate your cash flow because your business can be profitable but still lose cash through spending that doesn’t show up on your profit and loss statement. When it’s done correctly, a cash flow forecast will help you prepare ahead of time to account for seasonal lulls in business or anticipated periods of low revenue. This small business budgeting template helps quickly and easily determine the amount of money you’ll need to get your business off the ground — and provide a basis for comparison once you’re up and running.”