 | A major contributor to this article appears to have a close connection with its subject.(October 2019) |
 | |
| Industry | Real estate |
|---|---|
| Founded | 2004 |
| Founder | Thomas Sponholtz Chairman and Chief Executive Officer |
| Headquarters | San Francisco, California, United States |
Key people | Chief Executive Officer - Thomas Sponholtz Chief Financial Officer - Scott Case |
| Website | www |
Unison Home Ownership Investors (commonly known as Unison) is a home ownership investment company based in San Francisco, California.
Current company chairman Thomas Sponholtz founded the company that is now known as Unison in 2004, [1] [2] but the company did not start becoming involved in home ownership investment until 2007.
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 May 2013 the company announced it would provide down payment funding in combination with the portfolio loans of HomeStreet Bank. [5]
On September 19, 2013, the company announced that it would be launching its down payment funding in combination with RPM Mortgage loans in California. [6] [7]
On July 11, 2016, the company announced that it would be launching its down payment funding in combination with Guild Mortgage loans in Washington. [8] On August 1, 2016, they announced that they expanded the availability to consumers in Oregon and California.
On August 8, 2016, 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 1, 2017, the company was featured in HousingWire, highlighting additional states of operation. [11]
On February 21, 2017, then Prosper Marketplace President Ron Suber joined the company as an investor and strategic advisor. [12] [13]
On February 22, 2017, the company announced over 300 million in total capital raised. [14]
On May 16, 2017, 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. [15] [16] [17] [18]
On September 19, 2017, the company released findings from its survey of 2,018 Americans, conducted by Atomik Research, on the biggest barriers to home ownership. [19]
On November 13, 2017, the company announced multiple promotions and additions to its management team. [20] [21] [22]
On November 15, 2017, Unison Investment Management, the asset management arm of Unison Home Ownership Investors, released findings from a report which analyzed the current measurement of inflation and the effect on real estate investments in the United States. [23] [24]
On February 26, 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. [25]
On April 4, 2018, the company released its second annual Home Affordability Report, a comprehensive breakdown of housing affordability in 22 of the largest metro areas across the United States. The report found inequality in housing affordability, not only from city to city but also within cities from one neighborhood to another. [26]
On June 1, 2018, The New York Times wrote an article about shared equity programs that called attention to Unison, Landed, and Own Home Finance. [27]
On June 26, 2018, announced that it had closed a $40 Million Series B Funding Round. [28]
The company was featured on Bank Innovation's list of "2017 Innovators to Watch". [29]
The company was featured in GoBankingRates "10 Startups to Watch in 2018". [30]
In 2019, Unison was named to Deloitte's Fast500 as one of the fastest-growing companies in North America, ranking third in the Bay Area and nineteenth overall. [31]
The Down Payment Resource HPI currently tracks 33 shared equity programs. Most are city/county, non-profit or university administered programs. There are also new 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. [32]
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. [33]
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. [34] Rather, a home ownership investment [35] [2] is a shared piece of capital between the investor and the homeowner. 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. [36]
The company operates two programs, Unison HomeBuyer [37] and Unison HomeOwner. [38] [39] [40]
The first, HomeBuyer, works in combination with a traditional mortgage, [41] [42] 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. [43] Both programs remain interest-free without monthly payments for 30 years. [44] [45]
The company, in return, shares 35 percent of the appreciation in the home either when it is sold, [46] 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. [47] There is a minimum of 3 years required in order to realize the property appreciation. [48]
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. [49] [50]
In 2017 the average homebuyer under 35 spent 8% on a down payment. [51] [52] the company's business model involves splitting a 20% down payment with homebuyers. [3] [53]
Unison has relationships with Guaranteed Rate, HomeBridge Financial Services, Guild Mortgage, Valley Bank, Goldwater Bank, HomeStreet Bank, PRMG, Supreme Lending, LendUS and others. [54] [55]
Unison programs are currently 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. [56] [57] [58]
The Federal Housing Administration (FHA), also known as the Office of Housing within the Department of Housing and Urban Development (HUD), is a United States government agency founded by President Franklin Delano Roosevelt, created in part by the National Housing Act of 1934. The FHA insures mortgages made by private lenders for single-family properties, multifamily rental properties, hospitals, and residential care facilities. FHA mortgage insurance protects lenders against losses. If a property owner defaults on their mortgage, FHA pays a claim to the lender for the unpaid principal balance. Because lenders take on less risk, they are able to offer more mortgages. The goal of the organization is to facilitate access to affordable mortgage credit for low- and moderate-income and first-time homebuyers, for the construction of affordable and market rate rental properties, and for hospitals and residential care facilities in communities across the United States and its territories.
A bridge loan is a type of short-term loan, typically taken out for a period of 2 weeks to 3 years pending the arrangement of larger or longer-term financing. It is usually called a bridging loan in the United Kingdom, also known as a "caveat loan," and also known in some applications as a swing loan. In South African usage, the term bridging finance is more common, but is used in a more restricted sense than is common elsewhere.
An FHA insured loan is a US Federal Housing Administration mortgage insurance backed mortgage loan that is provided by an FHA-approved lender. FHA mortgage insurance protects lenders against losses. They have historically allowed lower-income Americans to borrow money to purchase a home that they would not otherwise be able to afford. Because this type of loan is more geared towards new house owners than real estate investors, FHA loans are different from conventional loans in the sense that the house must be owner-occupant for at least a year. Since loans with lower down-payments usually involve more risk to the lender, the home-buyer must pay a two-part mortgage insurance that involves a one-time bulk payment and a monthly payment to compensate for the increased risk. Frequently, individuals "refinance" or replace their FHA loan to remove their monthly mortgage insurance premium. Removing mortgage insurance premium by paying down the loan has become more difficult with FHA loans as of 2013.
Canada Mortgage and Housing Corporation is Canada's federal crown corporation responsible for administering the National Housing Act, with the mandate to improve housing by living conditions in the country.
Second mortgages, commonly referred to as junior liens, are loans secured by a property in addition to the primary mortgage. Depending on the time at which the second mortgage is originated, the loan can be structured as either a standalone second mortgage or piggyback second mortgage. Whilst a standalone second mortgage is opened subsequent to the primary loan, those with a piggyback loan structure are originated simultaneously with the primary mortgage. With regard to the method in which funds are withdrawn, second mortgages can be arranged as home equity loans or home equity lines of credit. Home equity loans are granted for the full amount at the time of loan origination in contrast to home equity lines of credit which permit the homeowner access to a predetermined amount which is repaid during the repayment period.
Equity sharing is another name for shared ownership or co-ownership. It takes one property, more than one owner, and blends them to maximize profit and tax deductions. Typically, the parties find a home and buy it together as co-owners, but sometimes they join to co-own a property one of them already owns. At the end of an agreed term, they buy one another out or sell the property and split the equity. In England, equity sharing and shared ownership are not the same thing.
A real-estate bubble or property bubble is a type of economic bubble that occurs periodically in local or global real estate markets, and it typically follows a land boom. A land boom is a rapid increase in the market price of real property such as housing until they reach unsustainable levels and then declines. This period, during the run-up to the crash, is also known as froth. The questions of whether real estate bubbles can be identified and prevented, and whether they have broader macroeconomic significance, are answered differently by schools of economic thought, as detailed below.
Down payment, is an initial up-front partial payment for the purchase of expensive items/services such as a car or a house. It is usually paid in cash or equivalent at the time of finalizing the transaction. A loan of some sort is then required to finance the remainder of the payment.
Mortgage insurance is an insurance policy which compensates lenders or investors in mortgage-backed securities for losses due to the default of a mortgage loan. Mortgage insurance can be either public or private depending upon the insurer. The policy is also known as a mortgage indemnity guarantee (MIG), particularly in the UK.
A mortgage loan or simply mortgage, in civil law jurisdicions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners to raise funds for any purpose while putting a lien on the property being mortgaged. The loan is "secured" on the borrower's property through a process known as mortgage origination. This means that a legal mechanism is put into place which allows the lender to take possession and sell the secured property to pay off the loan in the event the borrower defaults on the loan or otherwise fails to abide by its terms. The word mortgage is derived from a Law French term used in Britain in the Middle Ages meaning "death pledge" and refers to the pledge ending (dying) when either the obligation is fulfilled or the property is taken through foreclosure. A mortgage can also be described as "a borrower giving consideration in the form of a collateral for a benefit (loan)".
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The United States subprime mortgage crisis was a multinational financial crisis that occurred between 2007 and 2010 that contributed to the 2007–2008 global financial crisis. It was triggered by a large decline in US home prices after the collapse of a housing bubble, leading to mortgage delinquencies, foreclosures, and the devaluation of housing-related securities. Declines in residential investment preceded the Great Recession and were followed by reductions in household spending and then business investment. Spending reductions were more significant in areas with a combination of high household debt and larger housing price declines.
Seller financing is a loan provided by the seller of a property or business to the purchaser. When used in the context of residential real estate, it is also called "bond-for-title" or "owner financing." Usually, the purchaser will make some sort of down payment to the seller, and then make installment payments over a specified time, at an agreed-upon interest rate, until the loan is fully repaid. In layman's terms, this is when the seller in a transaction offers the buyer a loan rather than the buyer obtaining one from a bank. To a seller, this is an investment in which the return is guaranteed only by the buyer's credit-worthiness or ability and motivation to pay the mortgage. For a buyer it is often beneficial, because he/she may not be able to obtain a loan from a bank. In general, the loan is secured by the property being sold. In the event that the buyer defaults, the property is repossessed or foreclosed on exactly as it would be by a bank.
The California Housing Finance Agency (CalHFA), established in 1975, is an independent California state agency within the California Department of Housing and Community Development that makes low-rate housing loans through the sale of taxable and tax exempt bonds.
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The U.S. subprime mortgage crisis was a set of events and conditions that led to a financial crisis and subsequent recession that began in 2007. It was characterized by a rise in subprime mortgage delinquencies and foreclosures, and the resulting decline of securities backed by said mortgages. Several major financial institutions collapsed in September 2008, with significant disruption in the flow of credit to businesses and consumers and the onset of a severe global recession.
PACE financing is a means used in the United States of America of financing energy efficiency upgrades, disaster resiliency improvements, water conservation measures, or renewable energy installations of residential, commercial, and industrial property owners. Depending on state legislation, PACE financing can be used to finance building envelope energy efficiency improvements such as insulation and air sealing, cool roofs, water efficiency products, seismic retrofits, and hurricane preparedness measures. In some states, commercial PACE financing can also fund a portion of new construction projects, as long as the building owner agrees to build the new structure to exceed the local energy code.
Affordable housing in Canada is housing that is deemed affordable to those with a median household income in Canada.
A home ownership investment is used by home purchasers to raise funds to buy real estate or by home owners to extract cash from a real estate investment. In exchange for cash, the home owner shares in some percentage of the increase and sometimes also the decrease in value of the real estate property. When the home is sold, the home owner settles by returning to the investor some amount of the proceeds from the sale based on the change in value of the real estate asset. Alternatively, the contract may have a maturity period or may provide the homeowner the option to terminate the contract at their discretion. In this case, an appraisal may be necessary to deem the price change of the asset and therefore the return to the investor.
A cash offer refers to an offer made to purchase real estate submitted by purchasers who do not require any financing since they do not require a mortgage. The purchase is referred to as an "all-cash buyer." Such a buyer may also waive the appraisal, although not necessarily, since the contingency may exist to test or ensure the property's market value. The term “cash offer” is typically applied to contracts in which both of these contingencies do not appear. Cash offers are common in markets like Denver, Colorado, Seattle, Los Angeles, and are compounded by the limited supply of homes.