Do You Still Own Your Home With an HEI? The Deed vs. Lien Reality
In a standard Home Equity Investment (HEI) agreement, the homeowner typically retains legal ownership: your name remains on the deed and the provider does not become a co-owner. Terms vary by provider and state, so confirm the specific ownership and lien provisions in your contract with a licensed real estate attorney.
The Scout Executive Summary
- Your name stays on the deed: In a standard HEI agreement, you retain full legal title, occupancy rights, and control over day-to-day property decisions, and the HEI provider does not become a co-owner.
- The provider holds a junior lien: Instead of taking ownership, the investor records a secondary security claim against your property to protect their financial stake in your home’s future value.
- Daily living is unaffected, but future financing is impacted: While day-to-day use is entirely yours, the lien must be formally settled or subordinated if you choose to sell, refinance your mortgage, or take out a new loan.
In This Article:
- Do You Own Your Home With a Home Equity Investment?
- Does the HEI Provider Get Added to Your Deed?
- What Is the HEI Lien and How Does It Work?
- How Does the HEI Lien Affect Your Ability to Refinance?
- Can You Sell Your Home During an HEI Agreement?
- Can an HEI Company Foreclose on Your Home If There Are No Monthly Payments?
- What Are the Property Maintenance and Occupancy Rules During an HEI?
- Do You Still Own Your Home With an HEI: Common Questions
The Clear Line: Deed vs. Lien with an HEI
| Feature / Right | The Homeowner (Your Deed) | The HEI Provider (Their Lien) |
|---|---|---|
| Legal Title & Ownership | Retained. In a standard HEI, your name remains the sole name on the property record. | None. In a standard HEI, the provider is not added to your deed. |
| Occupancy & Physical Access | Full rights to live in, use, and enjoy the property without interference. | No right to enter, possess, or occupy the property. |
| Property Management | You choose paint colors, handling of repairs, and landscaping updates. | No say in daily upkeep (requires property to stay in good repair). |
| Financial Stake | Retains your primary equity plus a substantial percentage of appreciation. | Holds a contractual claim to a specific percentage of future home value. |
| Subsequent Sales / Financing | Full right to list or refinance at any time of your choosing. | Must be paid off or formally subordinate their position at closing. |
Do You Own Your Home With a Home Equity Investment?
Yes, you retain 100% legal ownership of your home with a Home Equity Investment (HEI). Your name remains the sole name on the property deed, and you maintain complete control over day-to-day occupancy, maintenance, and usage decisions.
Homeownership actually has two separate components that an HEI uncouples:
Legal ownership: the right to hold title, occupy the property, make decisions about it, and control its use. This stays with you entirely. The HEI provider does not share, inherit, or acquire any portion of legal ownership.
Economic interest: the financial stake in the home’s future value. This is what the HEI agreement affects. You agree to share a portion of the home’s future value at settlement with the investor in exchange for the lump sum you receive today.
The HEI separates these two components. You keep legal ownership and control. The investor acquires a contractual economic interest in a portion of the home’s future value, secured by a lien on the property.
What is a De Facto Ownership Restriction?
Even though an HEI provider does not own your physical bricks and mortar, their lien places de facto restrictions on your financial freedom. Because you cannot execute a cash-out refinance or take out a traditional third-priority HELOC without their express written permission, your absolute autonomy over your home’s equity is temporarily restricted until the contract is settled.
For a full explanation of how the HEI agreement works including the settlement calculation, see the Home Equity Investment Guide.
For a comparison of what HEIs cost versus HELOCs over time, see the HEI vs HELOC Cost Comparison.
Does the HEI Provider Get Added to Your Deed?
No, an HEI provider is never added to your property deed, and no co-ownership is created. The deed remains exclusively in your name throughout the entire lifespan of the investment term.
The deed is the legal document that establishes ownership of the property. In a standard HEI agreement, the deed does not change. Your name stays on it. The provider’s name does not appear on it. No co-ownership is created.
What the provider does instead is record a separate legal instrument against your property, a lien or deed of trust, that secures their financial interest. This is a fundamentally different document from the deed itself.
The distinction matters for several practical reasons:
You make all decisions about the property. The provider has no right to occupy, manage, alter, rent, or sell the home. You can rent the property out, make renovations, change landscaping, and use the home however your local zoning and HOA rules allow, without asking the provider’s permission for ordinary maintenance and use decisions.
The provider’s interest is financial, not possessory. They have a claim on a portion of the home’s future value. They do not have any right to be present in or control the property.
🐿️ Scout’s Tip
When in doubt, pull the public property records for your address after the HEI closes. You will see your name on the deed as the owner of record, and a separate recorded lien from the HEI provider. These are two distinct documents. Understanding the difference between them clarifies what the provider does and does not control about your home.
What Is the HEI Lien and How Does It Work?
An HEI lien is a junior legal claim recorded against your property title that secures the investor’s right to a portion of your home’s future value. It acts similarly to a traditional mortgage lien and must be paid off before you can sell or refinance the property.
When you sign an HEI agreement, the provider records a lien against your property to protect their financial interest. This lien is typically subordinate to your primary mortgage, meaning the mortgage lender holds a senior first-priority position and the HEI provider holds a junior second-priority position.
The Lien Priority Structure:
- First Position (Senior): Your primary mortgage lender (paid first at sale).
- Second Position (Junior): The HEI provider lien (paid second at sale).
- Third Position+: Any subsequent home equity loans, HELOCs, or tax liens.
In a lien priority scenario, senior lienholders are paid first from any proceeds at sale or refinance. Junior lienholders are paid from whatever remains after senior claims are satisfied.
What this means practically:
At sale: the title company routes payment to all lienholders in priority order from the sale proceeds. Your primary mortgage is paid off first. The HEI provider receives their settlement share next. You receive the remaining net proceeds.
At refinance: the new lender typically requires all junior liens to be resolved or subordinated before they will fund the new loan. This is where the HEI lien has the most practical impact on homeowners who want to refinance.
The lien remains recorded on your title from the closing date of the HEI agreement until the settlement is completed. After settlement, the provider releases the lien and it is removed from the public record.
Major HEI providers like Hometap and Point record their lien in second-priority position behind your primary mortgage.
🐿️ Scout’s Tip
A lien on your property is not the same as a co-owner on your deed. Your mortgage lender also holds a lien against your property, and you still own the home entirely. The HEI lien works the same way. It is a security interest, not an ownership interest. The distinction matters when someone asks whether the HEI company “owns part of your house.” They do not. They hold a financial claim on part of its future value.
How Does the HEI Lien Affect Your Ability to Refinance?
An HEI lien complicates refinancing because a new mortgage lender will require the HEI provider to either subordinate their lien (stay in second position) or be paid off completely at closing. While rate-and-term refinances are usually permitted with provider consent, cash-out refinances are frequently restricted or prohibited.
Three common refinancing scenarios with an HEI in place:
1. Rate-and-term refinance (no cash out): Most HEI providers will consent to subordinating their lien for a rate-and-term refinance because the new loan does not increase the homeowner’s debt load. The process typically requires notifying the HEI provider, waiting for their written consent, and coordinating the closing timeline accordingly. This adds steps and time but is generally achievable.
2. Cash-out refinance: Cash-out refinances are more complex with an HEI lien in place. Many HEI providers restrict or require consent for cash-out refinances, because extracting additional equity reduces the home’s future value available for the HEI settlement. Some providers prohibit cash-out refinances outright during the agreement term. Verify your specific contract before applying.
3. Using a refinance to buy out the HEI: A refinance that generates enough cash to pay off the HEI settlement entirely is typically the cleanest path. The lien is discharged at closing once the settlement is paid. This is the refinance buyout exit strategy covered in the HEI Term-End Strategy guide.
The practical timeline impact: Refinancing with an HEI in place takes longer than refinancing without one, because the provider’s consent process adds time to the transaction. Build extra lead time into any refinancing plan if you have an active HEI agreement. Refinance and subordination rules vary by provider and contract, so confirm your specific terms with your HEI provider and a licensed real estate attorney before applying.
Can You Sell Your Home During an HEI Agreement?
Yes, you can sell your home at any time during an HEI agreement, as selling is one of the standard methods used to settle the contract. When the home is sold, the title company automatically pays out the investor’s financial share directly from the escrow proceeds at closing.
When you sell, the title or escrow company routes the investor’s settlement share directly from the sale proceeds at closing, in the same way your primary mortgage is paid off. You receive the net proceeds after the mortgage payoff, the HEI settlement, closing costs, and any other liens are satisfied.
Three things to verify before listing:
- Confirm the settlement amount at your expected sale price. Before accepting an offer, calculate what the HEI settlement will be at that price. Make sure the sale proceeds are sufficient to cover the mortgage payoff, the HEI settlement, and closing costs, with a net you are comfortable with.
- Notify the HEI provider when you list. Most agreements require you to notify the provider when you intend to sell. The provider will order an appraisal as part of the settlement process. Build this into your closing timeline.
- Understand the appraisal dispute process. The provider’s appraisal determines the settlement amount. If you believe the appraisal understates your home’s value, verify your contract for dispute rights before the settlement is finalized.
Can an HEI Company Foreclose on Your Home If There Are No Monthly Payments?
Yes, an HEI provider can legally foreclose on your property if you violate major contractual obligations. Even though there are no monthly payments to miss, failing to pay property taxes, letting homeowners insurance lapse, or failing to maintain the property can trigger a technical default.
Because an HEI provider holds a recorded security lien, they retain foreclosure rights similar to a traditional mortgage lender. Since you cannot default by “missing a payment,” a technical default occurs when you threaten the investor’s underlying security.
Contract Violations That Can Trigger a Forced Sale:
Reaching the End of the Term: If your 10-year or 30-year term expires and you do not have the cash or a refinance lined up to buy out the provider, they have the contractual right to force a sale of the home to recoup their capital.
Property Tax Delinquency: If you fail to pay your local property taxes, the county can place a tax lien on the home that leaps ahead of the HEI provider in priority, triggering an automatic default.
Lapsing Insurance: Allowing your hazard or homeowner’s insurance to expire leaves the physical structure unprotected against catastrophic loss, violating the terms of the investment.
Severe Deferred Maintenance: Letting the home fall into structural disrepair directly diminishes the home’s future value, and therefore the investor’s return. Default and foreclosure provisions differ by provider and are governed by your contract and applicable state law. Review the specific default terms in your agreement with a licensed real estate attorney before signing.
What Are the Property Maintenance and Occupancy Rules During an HEI?
During an HEI, you must maintain the property in good repair and retain adequate homeowner’s insurance to protect the home’s value. Most providers require the home to remain your primary residence, though many allow temporary or partial renting subject to contract terms.
What you can generally do: Occupy the home as your primary residence throughout the term. Rent the property out, in most agreements, subject to your specific contract terms. Make standard improvements and renovations. Maintain the property as you normally would. Sell the home at any time by settling the agreement at closing.
What typically requires the provider’s consent or notification: Refinancing your primary mortgage, particularly a cash-out refinance. Taking out additional loans secured by the property, such as a HELOC or home equity loan. In some agreements, major structural changes or renovations that significantly alter the property’s value.
What you cannot do: Allow the property to fall into serious disrepair. Most HEI agreements include property maintenance requirements, because the provider’s financial interest depends on the home maintaining its value. Failure to maintain the property may give the provider grounds to accelerate the settlement. Abandon the property or allow it to go into foreclosure without addressing the HEI settlement.
For a complete breakdown of who qualifies for an HEI and what providers look for during underwriting, see the Who Qualifies for an HEI guide.
For a comparison of the major HEI providers and their specific agreement terms, see the Top HEI Companies guide.
For a full look at the pros and cons of HEIs beyond ownership questions, see the Home Equity Investment Pros and Cons guide.
Do You Still Own Your Home With an HEI: Common Questions
Do I still own my home with a home equity investment?
Yes. You retain full legal ownership and title throughout the entire HEI agreement term. Your name remains on the deed. The HEI provider is not added to the deed and does not become a co-owner. What the provider holds is a lien, a recorded financial claim on a portion of the home’s future value, not ownership of the property itself.
Does the HEI company get added to my deed?
No. The HEI provider does not appear on your deed at any point during the agreement. Your deed stays in your name. The provider records a separate lien against the property to secure their financial interest, but the deed itself does not change.
What is the difference between a lien and ownership?
A lien is a financial claim recorded against a property. Your mortgage lender holds a lien against your home, and you still own it entirely. The HEI lien works the same way. It gives the provider a security interest in the property’s future proceeds, not any right to occupy, manage, or control the home. Ownership means your name is on the deed. The lien does not change that.
Can I refinance my mortgage if I have an HEI?
Yes, but it requires the HEI provider’s consent and coordination. Rate-and-term refinances are generally achievable with provider consent to subordinate their lien. Cash-out refinances are more complex and may be restricted under some HEI agreements. Verify your specific contract terms before applying to refinance.
Can I sell my home during an HEI agreement?
Yes. Selling is one of the three standard HEI settlement paths and is permitted at any time. When you sell, the HEI settlement is paid from sale proceeds at closing, similar to how your mortgage is paid off. Confirm the settlement amount at your expected sale price before accepting an offer.
Can I rent out my home while I have an HEI?
In most agreements, yes. Most major HEI providers allow the property to be rented during the agreement term. Verify your specific contract for any restrictions on rental use before listing the property.
What happens to the HEI lien if my lender forecloses?
If your primary mortgage lender forecloses, the HEI investor’s junior lien may be eliminated as part of the foreclosure process, since the senior lienholder’s claim takes priority. The specific outcome depends on your contract terms and state law. This underscores the importance of maintaining your primary mortgage payments throughout the HEI term.
If your home value decreases, the HEI provider shares in the loss. Because their payout is tied to a percentage of your home’s future value, a market drop means the final settlement amount you owe them at the end of the term will be lower than their initial valuation calculations. For the full math on declining markets, see what happens if your home value drops.
Yes, you can buy out or settle an HEI at any point during the term without a prepayment penalty. Early settlement is typically achieved by ordering a new independent appraisal to calculate the investor’s current share value and paying them via a cash buyout or a mortgage refinance.
Getting a HELOC after an HEI is incredibly difficult because most traditional banks refuse to take a third-priority lien position on a property title. Additionally, the HEI contract itself usually requires the investor’s express written consent to take out any subsequent debt against the home.
EquitySquirrel is an educational resource, not a lender, financial advisor, or legal advisor. This content does not constitute financial, legal, or lending advice. HEI agreement terms vary by provider, verify specific rights, restrictions, and lien provisions directly in your contract before signing. The distinction between legal ownership and economic interest as described here is general in nature and may vary by jurisdiction and provider. Consult a licensed real estate attorney for advice specific to your situation. Aleksandra Kadzielawski, Lic #SA694336000.
