Homeownership investment startup Hometap has expanded into six states, the company announced Wednesday, making its services accessible to 20% of U.S. homeowners.
The company launched in Massachusetts last summer and quickly expanded to California. Now, its footprint also extends to Florida, New York, North Carolina and Virginia.
Hometap invests in homes alongside homeowners, offering them access to up to 20% of their equity in cash for a 10-year term in exchange for the chance to share in their home’s appreciation. If the home’s value declines, Hometap shares in the loss.
In practice, the product gives users access to their equity without incurring more debt.
Hometap founder and CEO Jeffrey Glass said most of the company’s clients fall into two categories: those who want access to funds to take advantage of opportunities, and those need cash to tackle challenges.
“Due to rising real estate values and stagnant wages, many American homeowners are house rich but cash poor,” said Glass. “Often, a significant amount of their net worth is tied up in their homes, and it’s hard for them to access it without selling. A home equity investment from Hometap is a great alternative for these people.”
Glass said Hometap plans to expand into several new states by year’s end, aiming to double its reach to 40% of U.S. homeowners.
He said the company plans to grow by close to 800% by the end of 2019.
“We are deeply committed to this mission of making homeownership less stressful,” he said. “We’re working pretty hard to try to help as many homeowners as this makes sense for.”