Can HEI Investors Get a Cut of Your Home Renovation Value? | 2026
The Scout Executive Summary
- Fund Upgrades with Zero Monthly Payments: An HEI lets you turn your built-in equity into cash upfront to pay for big renovations without adding a stressful monthly bill to your budget while fixing up your house.
- Built-In Rules Protect Your Profit: You don’t have to give up the value of your upgrades. Splitero subtracts your renovation value from your final bill, and Hometap automatically adjusts your contract rules on any major project over $25,000.
- Smart Timing Saves You Money: Getting the timing right keeps more equity in your pocket. If you can finish your high-value remodeling projects before signing your HEI paperwork, you lock in and protect all that brand-new home value from day one.
In this Article:
- Do HEI Investors Get a Share of the Value I Add Through Renovation?
- HEI Provider Comparison: Renovation Value Treatment
- How Much Does a Home Equity Investment Renovation Clause Cost Me?
- How Do Different HEI Providers Handle Home Renovation Value?
- How to Read the Renovation Clause in Your Agreement
- What Upgrades Qualify as an Eligible Home Improvement Credit?
- How Can Arizona Homeowners Avoid Paying HEI Investors For Upgrades?
- HEI Renovation Value: Common Questions
Do HEI Investors Get a Share of the Value I Add Through Renovation?
Yes, most HEI providers take a direct cut of your home’s post-renovation value when you clear the contract unless a specific exclusion is built into your terms. Because standard HEI agreements calculate settlement amounts based on your home’s total appraised value at the time of exit, any equity you force into the property via structural or cosmetic upgrades expands the investor’s payout.
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Most HEI companies utilize one of two core models to determine what you owe:
- Share of Total Home Value: The investor receives a fixed percentage of your home’s absolute appraised value at settlement. If your investment agreement guarantees them 15% of a home worth $1,200,000 at exit, they receive $180,000, regardless of whether that valuation was hit via natural market inflation or a custom kitchen remodel you funded yourself.
- Share of Appreciation: The investor takes a cut of the explicit profit margin generated between your starting appraisal and your ending appraisal. If your home value jumps by $200,000 entirely because you added a pristine backyard pool, the investor claims their percentage of that specific $200,000 gain.
Unless an explicit renovation adjustment clause is built into the contract text, your investments into your own home automatically increase your final settlement bill.
For the full HEI guide, see the Arizona Home Equity Investment Guide. For the full renovation financing hub, see the Renovation Financing Guide.
HEI Provider Comparison: Renovation Value Treatment
| Provider | Renovation Value Treatment | Settlement Impact on Homeowner |
| Splitero | Eligible Improvements Excluded: Deducts verified forced appreciation from the final payout calculation. | Investor does NOT share in the value of your approved upgrades. |
| Hometap | Renovation Adjustment Available: Offers an upward baseline valuation adjustment for projects over $25,000. | Investor’s share is reduced to protect a portion of major remodel values. |
| Point | Included by Default: Standard contracts base settlement on total final appraised value. | Investor shares in renovation value unless an upfront carve-out is negotiated. |
| Unlock | Included by Default: Standard contracts base settlement on total final appraised value. | Investor shares in renovation value unless an upfront carve-out is negotiated. |
| Unison | Included by Default: Standard contracts base settlement on total final appraised value. | Investor shares in renovation value unless an upfront carve-out is negotiated. |
Source: Published provider contract guidelines, Hometap project underwriting rules, and secondary market analysis. Note: Because HEI providers offer non-debt equity products rather than traditional mortgages, individual contract terms can fluctuate. Arizona homeowners must verify specific improvement addendums with their investment managers prior to closing.
How Much Does a Home Equity Investment Renovation Clause Cost Me?
An HEI contract lacking a renovation exclusion can cost you tens of thousands of dollars in lost equity at exit. To understand the true financial impact, let’s look at a realistic scenario for a North Scottsdale home.
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Consider a property valued at $950,000 at contract signing, where the owner accepts an $80,000 HEI cash payout in exchange for a 15% appreciation share. In year three, the homeowner executes a $150,000 kitchen, pool, and primary suite overhaul that increases the total property valuation to $1,250,000.
| Financial Metric | Standard HEI Model (No Exclusion) | Protective HEI Model (With Exclusion Credit) |
| Ending Appraised Value | $1,250,000 | $1,250,000 |
| Renovation Credit Adjustment | $0 (No adjustment) | -$300,000 (Value of improvements) |
| Adjusted Settlement Value | $1,250,000 | $950,000 |
| Investor Share Percentage | 15% of appreciation | 15% of appreciation |
| Total Investor Settlement Cost | $187,500 | $142,500 |
| Out-of-Pocket Renovation Cost | $150,000 | $150,000 |
| Loss to Homeowner at Exit | $45,000 paid to investor | $0 paid to investor |
Under standard terms, you hand over an extra $45,000 of your own equity to an investor who provided zero capital toward the construction.
How Do Different HEI Providers Handle Home Renovation Value?
Splitero and Hometap provide the most transparent, built-in contractual features designed to protect a homeowner’s renovation equity, while other structural models require case-by-case review. Because these programs are non-debt products rather than traditional loans, comparing their specific improvement guidelines is essential before signing.
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Splitero Improvement Credit
Splitero features a formalized consumer protection clause that deducts the market value generated by eligible home upgrades from the final exit calculation. They appraise the home at original signing and again at settlement. The forced appreciation driven strictly by your approved renovations is subtracted from the ending valuation, keeping that equity in your pocket.
Hometap Renovation Adjustment
Hometap provides an explicit framework for projects valued at $25,000 or more. If you execute a significant home upgrade during your 10-year investment term, Hometap allows for a “renovation adjustment.” Rather than a raw deduction at the end, their formula typically adjusts your original baseline valuation upward to ensure you aren’t heavily penalized for the equity you independently funded. Hometap carries a standard 4.5% origination fee.
Point, Unlock, and Unison Policies
Point, Unlock, and Unison typically utilize a standard “Shared Appreciation” or “Share of Total Value” model. By default, their baseline contracts automatically capture a percentage of your property’s total final value, regardless of what caused it to appreciate. However, these companies frequently allow homeowners to request an official project review before breaking ground to establish an independent appraisal baseline carve-out. Never assume an upgrade is protected unless you receive a signed addendum from your underwriting manager.
Scout’s Tip
Before signing any HEI, ask this exact question: “If I spend $100,000 renovating my home during the term, does that renovation value increase the amount I owe you at settlement?” Then ask for the answer in writing as part of the agreement terms. An investment manager who cannot answer this question clearly, or who answers verbally without providing written documentation, is a red flag.
How to Read the Renovation Clause in Your HEI Agreement
HEI agreements are long, complex documents, often 40 to 100+ pages. The renovation value treatment is typically buried in the settlement calculation section, not highlighted in the marketing materials or the initial offer summary.
Always ask a provider how renovations are treated at settlement, and get it in writing. Splitero covers this during pre-qualification, with no pressure to move forward. Ask Splitero how settlement works →
What to look for in your agreement:
Search for these terms in the contract documents:
- “Improvement adjustment”
- “Renovation credit”
- “Eligible improvements”
- “Home improvement exclusion”
- “Settlement value calculation”
- “Ending home value”
If none of these terms appear, the agreement almost certainly includes renovation value in the settlement calculation with no adjustment.
If the terms do appear, verify:
- What qualifies as an eligible improvement (cosmetic upgrades vs. structural improvements are treated differently)
- What documentation is required to claim the credit
- Who determines the value of the improvement at settlement (your appraisal or theirs)
- Whether there is a cap on the improvement credit
The CFPB’s guidance: The Consumer Financial Protection Bureau’s Issue Spotlight on home equity contracts notes that HEI agreements vary significantly from provider to provider and that many homeowners do not understand the true cost of the product at signing. Consulting a licensed real estate attorney before signing is strongly recommended.
The CFPB Issue Spotlight is available at consumerfinance.gov.
What Upgrades Qualify as an Eligible Home Improvement Credit?
Permitted, structural modifications that add permanent square footage or clear market utility typically qualify as eligible improvements under protective HEI clauses. Minor cosmetic updates do not qualify for value offsets.
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Generally eligible (most HEI providers with any credit):
- Structural additions, room additions, ADUs, casitas
- Kitchen full remodels (cabinetry, counters, appliances)
- Primary bathroom full remodels
- Pool and spa additions
- HVAC replacement
- Roof replacement
- Solar installation
- Exterior renovation (stucco, paint, doors, windows)
Generally not eligible or treated differently:
- Cosmetic updates (paint, landscaping, minor fixtures)
- Repairs that restore value rather than add value
- Furnishings and personal property
- Improvements that were not permitted and inspected
The documentation requirement: For Arizona homeowners planning to use an improvement credit at settlement, keep meticulous records. Contracts, invoices, permits, and appraisals documenting the before and after value of improvements are typically required. Start the file when the renovation begins, not when settlement approaches.
For the Arizona casita financing guide, see the Arizona Casita Financing Guide. For the Arizona pool financing guide, see the Arizona Pool Financing Guide.
How Can Arizona Homeowners Avoid Paying HEI Investors For Upgrades?
You can protect your equity by sequencing your renovations before signing an HEI, utilizing a separate home equity line of credit (HELOC) for project costs, or selecting a provider with an explicit improvement exclusion clause. Managing these financing structures requires strategic planning.
Curious if you can access funds through an HEI? You can pre-qualify in minutes. Check Your Eligibility with Splitero →
1. Evaluate Provider Rules First. If your renovation schedule is immediate, choose a provider like Splitero or Hometap that includes contract wording to protect your home improvements from the final payout calculation. Balance this choice against their upfront fees.
2. Sequence Projects Prior to Funding. Complete your highest-value renovation projects before signing any HEI contract. This locks the forced appreciation into your initial appraisal, keeping 100% of that value in your pocket.
3. Isolate Funds with a HELOC. Use a flexible HELOC specifically to finance your property construction costs while keeping your HEI funds entirely separated for non-real-estate financial goals. This protects your home’s appreciation from mixed calculation models.
For the full comparison of renovation financing options in Arizona, see the How to Finance a Scottsdale Renovation Without Refinancing guide.
For HEI settlement costs in detail, see the HEI Settlement Costs Arizona guide.
For a comparison of HEI and HELOC costs, see the HEI vs HELOC Arizona Cost Comparison.
HEI Renovation Value: Common Questions
With most HEI providers yes. Typically, HEI providers include renovation-driven appreciation in their settlement calculations unless your specific agreement contains an explicit renovation adjustment clause.
Splitero and Hometap offer the most explicitly defined, built-in contract features to protect your renovation equity. Splitero subtracts eligible forced appreciation from your final exit math, while Hometap offers a structured contract adjustment for major projects over $25,000. Other companies generally handle renovations on an individual, case-by-case basis before construction begins.
The HEI provider shares in the value your renovations created at settlement unless your agreement contains a renovation exclusion clause. The HEI settlement appraisal captures the post-renovation value, and the investor’s share percentage is applied to that value.
It is possible to negotiate terms before signing, but most providers present standard agreement terms. The most reliable approach is to choose Splitero if renovation exclusion matters to you, or to complete the renovation before signing an HEI with any other provider.
Yes. Structural improvements and additions typically receive more favorable treatment than cosmetic updates under any HEI provider’s improvement credit framework. Permits, contractor documentation, and before-and-after appraisals are generally required to claim any improvement credit.
Yes. Most HEI agreements require you to notify the provider of major improvements or renovations. Failure to notify may violate your agreement terms. Check your specific agreement for notification requirements before beginning any significant renovation work.
The appraiser reviews historical property permits, contract invoices, and material receipts to gauge market appreciation driven specifically by your upgrades compared to baseline neighborhood growth. Always retain complete project files from day one.
EquitySquirrel is an educational resource, not a lender or HEI provider. This content does not constitute financial, legal, or renovation advice. HEI renovation value treatment, improvement credit eligibility, and provider policies vary significantly and are subject to change. Verify current terms with each provider directly before signing. Aleksandra Kadzielawski, Licensed Arizona Realtor, Lic #SA694336000, eXp Realty. Member of WeSERV.
