EquiFi received a capital investment from The Palisades Group to fund its home equity sharing product. This offering is an alternative for homeowners who want to avoid taking on more property-backed debt.
The size of the Palisades investment was not disclosed. Previously, EquiFi raised $ 7 million in equity financing from private and venture capitalists. According to Crunchbase, the company received a $ 2.5 million convertible bond investment from Intero Real Estate Services in November 2018.
Shared equity products aren't loans, but rather agreements that give a company like EquiFi – or companies like Noah, Point, Unison, and Hometap – a position in the property that allows them to participate in any appreciation in value if the home sells or the contract term ends.
Unlike some of its competitors, EquiFi's offerings do not have a defined period of time, according to its website.
The money from Palisades will be used to fund the launch of the EquiFi Funding Instrument Equity Access product. The company plans to expand its existing California business and will soon commence operations in Washington, Arizona and Florida. The company also markets the product as an alternative to a reverse mortgage.
While Palisades funding is for equity access only, EquiFi will launch an equity sharing product in the first quarter of 2022 that can be used by homebuyers looking to reduce their monthly payments or as an alternative to private mortgage insurance.
"EquiFi is committed to the principle of home ownership for all, which enables generations to create wealth and amass the financial resources to live comfortably today and retire with dignity tomorrow," said EquiFi CEO David Shapiro in one Press release. "To align the investor with the homeowner's capital needs, EquiFi works with a wide variety of institutional investors, including insurance companies and pension funds."