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Unison Home Ownership Investors

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Unison Home Ownership Investors
IndustryReal estate
Founded2004; 20 years ago (2004)
FounderThomas Sponholtz Chairman and Chief Executive Officer
Headquarters
San Francisco, California
,
United States
Area served
United States
Key people
Chief Executive Officer - Thomas Sponholtz Chief Financial Officer - Scott Case
Websitewww.unison.com

Unison Home Ownership Investors (commonly known as Unison) is an American home ownership investment company based in San Francisco, California. The company uses a shared ownership model to allow customers to buy a home when they don't have enough capital to get a normal mortgage taking a percentage of the gain when the house is sold. The company also provides reverse mortgages for people to release funds out of an existing real estate asset taking a share of capital gain. The funding is provided by institutional investors such as pension funds.

History

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Thomas Sponholtz founded the company as FirstREX in 2004, but the company did not start becoming involved in home ownership investment until 2007.[1][2] Sponholtz became the company's chief executive.

Sponholtz founded Unison as a way to connect institutional investors to local real estate agents and home buyers who didn't have the capital required to purchase a home and didn't want to take out loans, make monthly payments, or incur debt.[3] Jim Riccitelli joined Unison as co-CEO several years later and served as head of the company's customer education program. From 2017 to 2019, Riccitelli assumed the role of president, and would focus on consumer education and financial literacy.[4]

In 2013 the company announced it would provide down payment funding in combination with the portfolio loans of HomeStreet Bank and with RPM Mortgage loans in California.[5][6][7]

In 2016, it launched its down payment funding in combination with Guild Mortgage loans in Washington and they expanded the availability to consumers in Oregon and California.[8] That same year the company announced it would offer its down payment funding with California Mortgage Company (First Cal) on single-family homes, condos and townhomes in combination with conventional loans meeting conforming and super-conforming guidelines.[9]

On December 5, 2016, FirstREX changed its name to Unison Home Ownership Investors.[10]

On February 21, 2017, then Prosper Marketplace President Ron Suber joined the company as an investor and strategic advisor.[11][12] The company also raised 300 million in total capital.[13] The company announced findings from the "Unison Home Affordability Report 2017," showcasing the percentage of homes accessible to the median household in major U.S. cities.[14][15][16][17] Later that year, the company announced multiple promotions and additions to its management team.[18][19][20]

In 2018, the company and Valley National Bank, the wholly owned subsidiary of Valley National Bancorp, announced the launch of their 5% down payment program which will be given in conjunction with an 80% loan-to-value mortgage.[21] The New York Times wrote an article about shared equity programs that called attention to Unison, Landed, and Own Home Finance.[22]

On June 26, 2018, Unison closed a $40 Million Series B Funding Round.[23]

Model

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The Down Payment Resource House Price Index tracks 33 shared equity programs. Most are city/county, non-profit or university administered programs. There are also programs in high cost markets, like the San Francisco Bay area, designed by private investors to help buyers finance homes that are outside conventional home price limits.[24]

The Urban Institute evaluated shared equity programs and found they are successful in linking low- and moderate-income people with affordable owner-occupied housing. In addition, home ownership among shared equity programs is sustainable, and shared equity homeowners resell their homes with the same frequency and for the same reasons as other homeowners.[25]

The company's basic business model differs from the traditional financing in that the consumer does not incur debt because there is no monthly payment or interest accrued.[26] Rather, a home ownership investment is a shared piece of capital between the investor and the homeowner.[27][2] A home ownership investment is financing based on partnership and shared incentives between the homeowner and the investor. In a home ownership investment, an investor provides financing in exchange for the opportunity to share in the gain or loss in the home's value when the homeowner decides to sell their home. There are no interest charges or monthly payments on the financing provided.[28]

The company operates two programs, Unison HomeBuyer and Unison HomeOwner.[29][30][31][32]

The first, HomeBuyer, works in combination with a traditional mortgage,[33][34] providing 5% to 15% of a 20% down payment, while the HomeOwner program is geared toward current homeowners looking to tap into their home equity.[35] Both programs remain interest-free without monthly payments for 30 years.[36][37]

The company, in return, shares 35 percent of the appreciation in the home either when it is sold,[38] after 30 years, or when the borrower decides to pay back the investment. Conversely, if the home depreciates, the company shares in 35 percent of the loss.[39] There is a minimum of 3 years required in order to realize the property appreciation.[40]

The company's programs look to connect pension funds and institutional investors and their private risk capital with the growing number of retiring baby boomers with inadequate savings, college graduates with student loan debt, first time home buyers, and Millennials.[41][42]

In 2017 the average homebuyer under 35 spent 8% on a down payment.[43][44] the company's business model involves splitting a 20% down payment with homebuyers.[3][45]

Unison has relationships with Guaranteed Rate, HomeBridge Financial Services, Guild Mortgage, Valley Bank, Goldwater Bank, HomeStreet Bank, PRMG, Supreme Lending, LendUS and others.[46][47]

Unison programs are available in 30 states including Arizona, California, Connecticut, Oregon, Washington, Illinois, Massachusetts, Maryland, New Jersey, New York, Pennsylvania, Virginia, Florida, Georgia, Ohio, Michigan, Minnesota, Nevada, Colorado, North Carolina, Missouri, Delaware, Indiana, Kansas, Kentucky, New Mexico, South Carolina, Tennessee, Utah, Wisconsin and Washington, DC.[48][49][50]

References

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  1. ^ "Equity Access - Marin Magazine - May 2007 - Marin County, California". www.marinmagazine.com. 10 April 2007. Retrieved 2017-08-25.
  2. ^ a b "Podcast 103: Thomas Sponholtz and Jim Riccitelli of Unison - Lend Academy". Lend Academy. 2017-06-02. Retrieved 2017-11-15.
  3. ^ a b Bundrick, Hal (13 March 2017). "This company will double your down payment. What's the catch?". USA TODAY. Retrieved 4 July 2017.
  4. ^ Investors, Unison Home Ownership. "Unison Experiences Monumental Growth and Announces 2018 Expansion Plans". www.prnewswire.com (Press release). Retrieved 2017-11-14.
  5. ^ "FirstREX, HomeStreet Bank partner to provide down payment funding". Retrieved 2017-12-07.
  6. ^ "FirstREX and RPM Mortgage Introduce New Down Payment Solution For Homebuyers - RPM Mortgage". RPM Mortgage. Retrieved 2017-12-07.
  7. ^ "FirstREX and RPM Mortgage Introduce New Down Payment Solution for Homebuyers". PRWeb. Retrieved 2017-12-07.
  8. ^ NationalMortgageProfessional.com (2016-07-12). "Guild Mortgage Partners With FirstREX on Downpayment Assistance Programs". National Mortgage Professional Magazine. Retrieved 2017-10-10.
  9. ^ "First Cal Mortgage & FirstREX Bridge the Down Payment Gap for Homebuyers With Home Ownership Investments for Conforming and Super-Conforming Loans". www.businesswire.com. 8 August 2016. Retrieved 2017-11-16.
  10. ^ Investors, Unison Home Ownership. "FirstREX is changing its name to Unison Home Ownership Investors and making it possible for more people to buy a home today". www.prnewswire.com. Retrieved 2017-08-25.
  11. ^ Investors, Unison Home Ownership. "Prosper Marketplace President Ron Suber Joins Unison as an Investor and Strategic Advisor". www.prnewswire.com (Press release). Retrieved 2017-10-10.
  12. ^ "Ron Suber Invests in Unison, Becomes Strategic Advisor to Home Ownership Investment Platform | Crowdfund Insider". Crowdfund Insider. 2017-02-21. Retrieved 2017-10-10.
  13. ^ Investors, Unison Home Ownership. "Unison Home Ownership Investors Announces Over $300 Million in Total Capital Raised and Key Leadership Appointments". www.prnewswire.com (Press release). Retrieved 2017-10-10.
  14. ^ Investors, Unison Home Ownership. "Unison Home Affordability Report Shows Startling Gap Between Major US Cities and Neighborhoods". www.prnewswire.com (Press release). Retrieved 2017-11-14.
  15. ^ Martin, Emmie (2017-05-16). "The salary you need to afford a home in 20 major US cities". CNBC. Retrieved 2017-11-14.
  16. ^ "San Franciscans age 25-44 can afford only 1.4 percent of city homes". Curbed SF. Retrieved 2017-11-14.
  17. ^ Cindy (2017-05-29). "A Look at Shared Real Estate Investing with Unison | FintekNews". FintekNews. Retrieved 2017-11-15.
  18. ^ Investors, Unison Home Ownership. "Unison Experiences Monumental Growth and Announces 2018 Expansion Plans". www.prnewswire.com (Press release). Retrieved 2017-11-14.
  19. ^ "Real Estate Fintech Firm Unison Announces 2018 Expansion Plans | Crowdfund Insider". Crowdfund Insider. 2017-11-13. Retrieved 2017-11-15.
  20. ^ Calvey, Mark (Nov 15, 2017). "S.F. real estate fintech Unison revamps management ahead of big expansion". www.bizjournals.com. San Francisco Business Times. Retrieved 7 April 2023.
  21. ^ "Valley National Bank and Unison launch 5% down program". Retrieved 2018-03-05.
  22. ^ Bernard, Tara Siegel (June 2018). "Getting Down Payment Help Now. Sharing Home's Gain (or Loss) Later". The New York Times. Retrieved 2018-06-27.
  23. ^ Investors, Unison Home Ownership. "Unison Home Ownership Investors Closes $40 Million Series B Funding Round". www.prnewswire.com (Press release). Retrieved 2018-06-26.
  24. ^ "Shared Equity Programs Gain Popularity for Municipalities, Private Investors | Down Payment Resource". Down Payment Resource. 2017-08-23. Retrieved 2018-03-05.
  25. ^ "Shared Equity Research". Urban Institute. 5 January 2015. Retrieved 2018-03-05.
  26. ^ "The first retail lender to offer Unison Homebuyer". Guild Mortgage. Retrieved 4 July 2017.
  27. ^ "Unison Leverages Institutional Investors to Help Home Buyers Bridge Affordability Gap - Finovate". Finovate. 2017-09-06. Retrieved 2017-10-10.
  28. ^ "Podcast 103: Thomas Sponholtz and Jim Riccitelli of Unison - Lend Academy". Lend Academy. 2017-06-02. Retrieved 2017-11-16.
  29. ^ "FinovateSpring 2017 – Unison - Finovate". Finovate. Retrieved 2017-10-10.
  30. ^ "Unison Showcases Home Ownership Investment Programs at FinovateSpring 2017". www.prnewswire.com. 19 April 2017. Retrieved 4 July 2017.
  31. ^ "Unison HomeBuyer Review: Avoid PMI and Keep Your Cash | PT Money". PT Money. 2017-03-06. Retrieved 2017-08-25.
  32. ^ "Unison HomeOwner Review: Get Cash for Your Home | PT Money". PT Money. 2017-07-20. Retrieved 2017-08-25.
  33. ^ Riquier, Andrea. "With 30 programs and counting, home-equity sharing is one way to clear a down payment hurdle". MarketWatch. Retrieved 2017-08-25.
  34. ^ "Shared Equity Programs Gain Popularity for Municipalities, Private Investors | Down Payment Resource". Down Payment Resource. 2017-08-23. Retrieved 2017-08-25.
  35. ^ "These startups want to buy a share of your house. Is that a good idea? - The Boston Globe". BostonGlobe.com. Retrieved 2018-07-24.
  36. ^ Asatryan, Diana (31 May 2017). "Unison Wants to Turn Homes into (Liquid) Assets". Bank Innovation. Retrieved 4 July 2017.
  37. ^ "How to get down payment help if you don't have rich parents". San Francisco Chronicle. Retrieved 2017-08-25.
  38. ^ "This company will double your down payment. What's the catch?". 13 March 2017. Retrieved 25 August 2017.
  39. ^ "How consumer demand is fueling a mortgage transformation". Retrieved 2017-10-10.
  40. ^ "One Click Real estate". benzinga.wistia.com. Retrieved 2017-10-10.
  41. ^ Miller, Peter (22 August 2017). "SHARED EQUITY — STARTER HOMES FOR THE NEXT GENERATION". www.realtytrac.com.
  42. ^ "Need Help Buying a Home? Fintech Firm Unison Offers Unique Assistance to Purchase the Home of Your Dreams". Crowdfund Insider. 2017-04-17. Retrieved 2017-08-28.
  43. ^ Strutner, Suzy (17 May 2017). "Here's The Salary You Need To Afford A Home In 22 U.S. Cities". Huffington Post. Retrieved 4 July 2017.
  44. ^ Martin, Emmie (16 May 2017). "The salary you need to afford a home in 20 major US cities". CNBC. Retrieved 4 July 2017.
  45. ^ Dhir, Heena (22 March 2017). "How Unison makes down payments possible". Lending Times. Retrieved 4 July 2017.
  46. ^ "Money With The Down Payment Hurdle". The New York Times. 31 May 2017. Retrieved 4 July 2017.
  47. ^ "New down payment option could boost homeownership". Inman. Retrieved 2017-10-10.
  48. ^ "Buyers Alert: Should You Trade Future Home Equity for Down Payment Help?". Real Estate News and Advice | Realtor.com®. 2017-01-25. Retrieved 2017-10-18.
  49. ^ Investors, Unison Home Ownership. "Unison Reports Fast Company Growth Supported by Strategic Hires and New Market Expansion". www.prnewswire.com (Press release). Retrieved 2018-04-24.
  50. ^ "Unison Expands To Eight Additional States". www.unison.com/article/press/unison_new_states.
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