DFPI Warns Homeowners About Home Equity “Investment” Risks

The California Department of Financial Protection and Innovation (DFPI) issued a consumer alert warning homeowners about the financial risks associated with Home Equity “Investment” (HEI) products. These shared equity agreements provide upfront cash in exchange for a future lump-sum repayment tied to the property’s appreciated value, which can become costly if housing prices rise or if return caps are set too high. The regulator advises consumers to carefully review repayment terms, compare HEIs with traditional loans or assistance programs, and submit complaints directly through the agency’s official portal.

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June 12, 2026

Consumers should be aware of a relatively new type of financial product called a Home Equity “Investment” (HEI) , also referred to as a shared appreciation or shared equity product. These products are often marketed as a way for homeowners to access cash without taking on additional monthly payments. However, in exchange for upfront funds, you must pay the HEI provider a share of your home’s future value. This amount must be repaid later as a lump sum and can become very expensive if your home value increases. Although HEIs may appear flexible, they are complex agreements that can lead to significant or unexpected costs .

Before entering an HEI agreement, consumers should make sure to review all terms, including how the provider’s share is calculated, when repayment is required, and what fees or charges apply. Some HEIs include limits on the provider’s potential returns, but these caps may be set high enough that they offer little real protection.

If you are considering an HEI, compare it to alternatives that could meet your needs such as home equity loans, home equity lines of credit (HELOCs), or state and local assistance programs, and consider consulting a trusted financial professional.

You can learn more about HEIs here and via the Consumer Financial Protection Bureau .

If you have concerns with an HEI or shared appreciation product, please submit a complaint at dfpi.ca.gov or call (866) 275-2677

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Source: California Department of Financial Protection and Innovation — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works