Leading Institutional Investors Bain Capital and Group 1001’s Delaware Life Further Validate This Emerging Asset Class
Hometap, which provides a smart, new loan alternative for tapping into home equity without taking on debt, announced that it has received capital commitments of $245 million from leading investors including Bain Capital and Group 1001’s Delaware Life Insurance Company, and other of its affiliated insurance companies, to its latest institutional asset investment fund. The new fund is Hometap’s third institutional investment vehicle and will be the largest to date. It comes on the heels of a recent period of rapid growth and expansion for the company, which maintains its strong momentum as it begins 2022.
Hometap allows homeowners to receive debt-free cash in exchange for a share of their home’s future value. Homeowners can use the cash to meet a variety of needs from paying off credit-card debt to starting a business to buying a second home. When the home sells or the homeowner settles the investment, Hometap is paid out an agreed-upon percentage of the sale price or current appraised value.
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“While homeowners have been fairly limited in the past when it comes to financing options, the landscape is changing for the better, with innovative solutions emerging that prioritize flexibility and ease. We’re excited to be able to offer more homeowners a fast, debt-free alternative that will deliver on our mission to make their lives less stressful,” said Hometap CEO Jeffrey Glass. “We’re also thrilled to be building an attractive asset class that provides both diversification and inflation-hedging benefits for institutional investors. It’s incredibly rewarding to work with capital partners who are as committed to helping homeowners, supporting our mission, and doing good in the world as we are.”
Hometap’s third institutional fund is not only designed to bring its unique home equity investment product to more homeowners across the U.S., but also to give investors the opportunity to diversify their portfolios and participate in the U.S. residential real estate asset class — which can deliver strong risk-adjusted returns that historically have both low correlation to public equities and protection against inflation over time.
“We believe Hometap provides homeowners with a compelling, debt-free financing alternative and investors with a diversified, attractive relative value way to make a long-term investment in U.S. residential assets,” said David DesPrez, Director at Bain Capital. “We are proud to partner with the Hometap team as they bring value to more homeowners across the country.”
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“With a growing number of homeowners seeking creative ways to access their home equity, Hometap offers an attractive, debt-free solution that we are proud to support,” said Justin Ostroff, Senior Managing Director of G1001 Innovation Group. “This is a compelling new asset class that fits within Group 1001’s mission to offer useful and intuitive financial products accessible to everyone, and we recognize the significant opportunity for Hometap to continue to institutionalize this market. It not only empowers homeowners to benefit from the equity they’ve built in their homes, but also allows investors to gain exposure to residential home price appreciation in a unique way.”
Hometap’s product has been positively received by its invested homeowners, many of whom have built substantial equity in their homes and were seeking partial liquidity to handle life expenses, but for whom borrowing through traditional means like a loan may not have been feasible or desirable. The company measures homeowner satisfaction through Trustpilot, where its hundreds of five-star reviews reflect the direct and positive impact Hometap Investments have made on the lives of individuals and families throughout the country.
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