FAQ

What is a Home Equity Agreement (HEA)?

A Home Equity Agreement (HEA) is not a loan. It is an agreement between a homeowner and an investment company (Leap). You receive a lump sum cash payment in exchange for a portion of your existing home’s equity.

Are Home Equity Investments (HEIs) and Home Equity Agreement (HEAs) the same?

Yes.

How is a Leap Home Equity Investment different from a reverse mortgage?

Home Equity Agreements represent an equity investment in the property. In contrast, reverse mortgages represent an increasing debt obligation and require the homeowner to both live in the home and be at least 62 years old. Some of the other differences are shown below:

	Home Equity Contract	Reverse Mortgage
Age Requirement	No	Yes
Must Pay Off All Outstanding Mortgages	No	Yes
Debt	No	Yes
Interest Charged	No	Yes
Hard to Unwind	No	Yes
Primary Residence Restriction	No	Yes

Can Leap work with me if I have a reverse mortgage or another shared equity agreement?

In some cases, Leap may be able to issue an HEA on a property where there is a reverse mortgage, but not on a property where there is an existing Home Equity Agreement. Feel free to contact us to discuss your specific situation.

How do homeowners qualify for a Leap Home Equity Investment?

To qualify for a Leap Home Equity Investment, homeowners must have at least 30% of equity in their home. The mortgage(s) on the home cannot exceed 70% of the total valuation of the home.

In which states is Leap available now?

Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Maryland, Michigan, Missouri, North Carolina, New Jersey, New Mexico, Nevada, New York, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Utah, Virginia, Washington, Wisconsin

What types of property are eligible for a Leap Home Equity Investment?

All single family residences (SFRs) are eligible for Leap home equity investments. This includes: primary and secondary residences, as well as investment properties and vacation homes.

How is my property's value determined?

Through an appraisal process using an Automated Valuation Model (AVM).

What happens if my home value decreases?

If your home value drops below the original appraised value, Leap shares in the loss. In some cases, you may pay back less than what you received from Leap.

When and how is Leap paid?

Your Home Equity Investment agreement comes with a 30-year term, but you have the flexibility to repay Leap any time you want within that term period. You can repay Leap in the following ways:

A home sale
A HELOC or cash-out refinance
Another source of funds

Can I repay Leap before the end of the term?

You have the flexibility to buy Leap out at any time during your term. There's no lockout or prepayment penalty. Leap is with you for as long – or as short – as you'd like.

Are there really no monthly payments associated with Leap?

Correct: There are no monthly payments, which makes a Home Equity Investment a great financing solution for homeowners looking to improve cash flow. Instead, homeowners pay back in one lump sum any time they like before the end of their investment term, typically when they refinance or sell.

How much does Leap cost? For example, are there fees associated with a Leap investment?

Depending on the type of agreement you enter into, and your particular financial profile, there may be administrative fees, which are usually $1,000 or less.

Are there any restrictions to what I can do with Leap funds?

There are no restrictions on how you can use Leap funds, with the exception of our Leap Restore program.

Leap Restore is designed to increase homeowners’ financial relevance. Consequently, approximately 95% of the Leap Restore sum payment is earmarked for debt repayment (improving the homeowner’s debt-to-income ratio) and increasing the homeowner’s credit score.

How are bonds linked to mortgage rates?

When interest rates rise, mortgage rates rise; when that happens, bond prices usually decrease. They typically move in opposite directions.

How does Leap make money?

HEA investors such as Leap make money as the home’s value appreciates over the term of the HEA agreement. As the home appreciates in value, the investor’s (e.g., Leap) equity stake in the home appreciates along with the homeowner’s.

How does Leap's technology help eliminate potential bias in the HEA process?

Leap's technology is a data-driven solution that leverages Artificial Intelligence (AI) and Machine Learning (ML) to assess a borrower’s credit risk and resiliency, analyzing a borrower’s ability and willingness to pay. Conversely, traditional credit scoring methods inaccurately classify millions of borrowers as non-prime, thereby excluding these borrowers from many consumer finance products. Our technology corrects this.

If your question isn't addressed in our FAQ please feel free to Contact Us and we'll be happy to help!