Homeownership investors help with downpayments

A buying program called “homeownership investors” can help buyers purchase a larger home than they could otherwise afford or, in some cases, help a buyer qualify for a home he or she could not afford otherwise.

On the front end, the process simply gives homebuyers money towards a downpayment – money that doesn’t have to be paid back either though monthly payments or even interest as long as the buyer lives in the home. The extra money can help a buyer upgrade to a bigger property or pay less per month on the mortgage since the total loan amount will be less.

However, homeownership investors consider the money exactly that – their money invested for potential return. In exchange for loaning the money, they expect to be paid back at the time the buyer eventually sells the home, and they also expect a percentage of any equity increase in the property.

While the program may help buyers upfront, long-term owners, upon sale, will find that they have less money toward retirement or other life goals after they pay back the initial loan and the percent of equity they agreed on.

One of the first companies to invest in homeowners is FirstREX, which recently changed its name to Unison. Its flagship program is called Unison HomeBuyer. It says the program is now “available to more first-time, millennial and move-up buyers across the country.”

Unison provides up to half of the downpayment required on a home as a loan with no monthly payments or interest. The company says it hopes to earn a return on its investment by sharing in the appreciation when the homeowner eventually sells, but if the home’s value decreases, Unison will also share in the loss.

Source : Florida Realtors