Hometap, a Boston-based financial technology company pioneering debt-free home equity financing for American homeowners, announced the closing of HTAP 2024-2, a $278 million securitization backed by Hometap-originated home equity investments. This is the second securitization of Hometap-originated home equity investments this year, following closely on the heels of HTAP 2024-1, the oversubscribed debut of Hometap’s proprietary securitization platform.
This securitization closed on October 3, 2024, and featured a Morningstar DBRS BBB(sf)-rated $215 million Class A tranche and a BBB(low)(sf)-rated $14 million Class B tranche.
Hometap’s HEI product enables homeowners to access the equity in their homes without taking on additional debt obligations or selling their homes. By investing along with homeowners, Hometap offers cash in exchange for a share of their home’s future value — all without any monthly payments over the life of the investment. And features of the current macroeconomic environment (interest rates, high inflation, and increased reliance on borrowing) have helped HEIs gain significant traction with homeowners and investors in recent years.
These conditions have led homeowners to seek alternative financing solutions like HEIs while simultaneously creating attractive investment opportunities for institutional investors due to the asset class’s unique characteristics. The successful execution of multiple securitizations this year, including two featuring Hometap HEIs, demonstrates the growing sophistication and appeal of the HEI market. As a result, both homeowners and investors recognize the benefits of this rapidly maturing asset class.
Nomura and Texas Capital Securities served as co-structuring leads and joint bookrunners.
KEY QUOTES:
“We continue to expand our capital market footprint and capabilities. This broadly subscribed securitization demonstrates our continued capacity to create investment products that resonate with investors. Attracting capital is paramount to our ability to deliver on our mission of making homeownership less stressful and more accessible. We’re proud of the success of this transaction and grateful to the homeowners, partners, and investors who have placed trust in Hometap.”
-Jeffrey Glass, Co-Founder & CEO of Hometap
“The successful closure of HTAP 2024-2 further validates the strength of Hometap’s brand among capital markets investors. We are gratified that five investors chose to participate in the asset class for the first time through HTAP 2024-2. As investor awareness of and appetite for HEI assets continues to grow, we are committed to bringing securitizations backed by Hometap HEIs to market on a routine cadence. We will continue to scale our operations to meet the growing demand for HEIs, while remaining dedicated to maintaining the high standards of quality and integrity we hold ourselves to across the organization.”
-Cara Newman, Hometap Head of Structured Finance
