Unison Raises $40M for Shared Appreciation Product, 26% of Users Over 60 Years Old

Underscoring the demand for other home financing options, Unison Home Ownership Investors, a company that financially assists both homebuyers and owners, recently announced a Series B raise of $40 million from investors.

Led by F-Prime Capital, along with Citi Ventures and Royal Bank of Canada, the $40 million raise has been allocated to “fuel growth in new and existing markets, build brand awareness, expand business operations, acquire new talent and further advance its technology platform,” according to a press release.

Unison’s two programs will benefit from the funds raised. The HomeOwner program allows current homeowners to tap into their home equity without borrowing. Of HomeOwner customers, 26.5% are over the age of 60, Unison’s Corporate Communications Director Michael Micheletti told RMD. Their other program, the HomeBuyer program, allows prospective home purchasers to “double to quadruple” a down payment to make purchasing a house more attainable.


Unison HomeOwner is currently available in 22 states, as well as Washington, D.C.
According to the company’s website, Unison weathers any home losses or gains with you when you sell your home during the HomeOwner program.

“In some cases we provide up to 20% of the current market value of your home. You make no monthly payments to us. Instead we hope to earn a return on our investment by sharing in the appreciation when you sell your home – up to 30 years in the future,” the website states.

The HomeBuyer program also allows consumers to use the money from Unison for up to 30 years without interest or monthly payments, according to the release.

Arvind Purushotham, the managing director and co-head of venture investing at Citi Ventures, said he is excited to join Unison in its mission of providing homeowners and buyers with financial solutions.

“As housing affordability continues to decrease, especially in urban areas, Unison brings a new financial solution for home ownership that benefits consumers, lenders and institutional investors,” Purushotham said in a statement.

Written by Maggie Callahan

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  • For some this could be a better product. It is a true equity release product since the homeowner has a lower interest in the home at closing, generally lower home appreciation rights.

  • Unison basically gives you 17.5% of your home value in return for 70% of its future appreciation. Four year minimum else fees. Ten-year APR if appreciation is 4% per annum is like 11.8%, if 2%, APR is 6.9%, if 6%, APR is 15.8%!

      • Let’s call it IRR (Internal Rate of Return). It may be ROI to the investor, but it is an annualized percentage cost to the homeowner.

      • wshart,

        How are there costs to the homeowner on a Unison transaction? The homeowner SELLS an asset [known as an option (appreciation rights)] to Unison. It is no different than the following example:

        Let us say that you bought a share of XYZ stock for $100 and five years later your brother purchases 50% of the appreciation on the share of XYZ stock from that day forward for $120 when the stock is worth $300. 10 years after purchasing the stock in accordance with the terms of the option agreement, you sell the stock for $860.

        What happens on the day you sold the stock?. The economic and tax rules say the total sales price is $980, of which $120 you received five years before. The total costs for the stock and option are $220. The resulting gain is $760 of which $600 belongs to you (the stockholder) and $160 of the gain belongs to your brother as the owner of the purchased appreciation rights. You owe your brother $280 for his interests in the stock. Your proceeds are the $120 received from your brother for the appreciation rights plus $580 from the sale for a total of $700 while your brother gets $280 from you. The only cost you had was the original $100 you paid for the stock. The costs your brother had was the $120 he paid you for the appreciation rights.

        The 50% appreciation interest is an asset you sold to your bother. So for tax purposes your proceeds on the sale was $700 to you with a cost of $100 and your brothers’ proceeds are $280 with a purchase price of $120.

        The situation with a home is much harder. To compute IRR not only do you need to know the price of the home, the sales price of the option and the sales price of the home but also need to know 1) costs of owning the home, 2) the free use value of using the home by the homeowner, and 3) the purchase and sales costs of the purchase and sale of the home along with any costs related to the option transaction. There are simplified approaches that many times give a reasonable result but what fun is there in that but then again without doing the difficult work, it is hard to know if the result on the simplified approach is reasonable or not. But then again what is the value of cash when you really need it?

      • Jim, We’re spending to much time on this. Foregone equity when a homeowner sells their home is certainly a cost (Unison’s cut). The APR’s I showed are a calculation of what ‘Annual Percentage Rate’ the homeowner would have to earn on the money he initially received from Unison to offset the equity lost when the deal is finished.

      • wshart,

        The problem is you are not looking at this as a sale of a real estate interest. I sold a home 29 years ago. It was recently sold for a lot more than I got for it. Is that a cost to me for not keeping the home? Maybe theoretically from some kind of ridiculous economic standpoint but not from any other recognized standpoint.

        Yet your APR is dependent on whether the home sold over its Unison appraised value. But what if it was sold at a loss? APRs are indifferent to gain or loss on the sale of the underlying collateral.

        Let us say that the home was purchased decades ago for $150,000. When the Unison transaction went through the agreed appraised value was $500,000 but ten years later the home was sold $490,000. The total gain to the home owner before selling and fix-up costs would be $340,000. The amount paid for the option would generally have to be returned but nothing more. There would be no APR but look at a HECM in this case. There would be interest expense with an APR.

        APRs are only used with loans, not on the sale of property interest and its resale. It is an incorrect use of APR.

  • John,

    This is a real estate transaction, not a loan. This is a carryover of the REX Agreement and is the same as the second version of Equity Key. These actual real estate rights, not make believe “shared appreciation rights” that simply allows for more proceeds at a higher interest rate like the HECM Shared Appreciation Rights Addendum that is still valid today (except no lender offers it).

  • John,

    At one time even a HECM was offered with Shared Appreciation Rights but that addendum was simply more principal limit at a higher interest rate, normally expressed as an overall blended rate.

    The Unison transaction is the actual sale of a portion the real estate right to appreciation. While Unison pays a referral fee to NMLS and real estate licensees, to become a true salesperson for Unison generally requires a real estate license in some states. A NMLS license is never required because it is not a residential mortgage.

    I hope that helps.

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