A growing number of millennials have given up on the thought of homeownership in the prohibitively expensive Bay Area, with the cost of a starter home edging up towards $1,500,000. Even saving for the required 20% down payment in order to qualify for a home mortgage can be challenging living in what is now the most expensive city in the US.
Not to despair! There is hope on the horizon with an alternative product now available through Unison HomeBuyer. Unison co-invests alongside home buyers and contributes up to half of the down payment on a home purchase. This is a home co-investment, not a loan, so there are never any monthly payments and there is no interest charged. Instead, Unison hopes to earn a return on its co-investment from a portion of the appreciation when the homeowner sells at a profit.
Unison can provide you with the cash today so you can put 20% down. Your monthly payments may actually be the same or less than the monthly payment on the home you would have settled for. With Unison a bigger home doesn’t necessarily translate to bigger payments.
Unison’s share of the appreciation depends on the amount of their co-investment.
The homeowner retains all the equity that they build by making monthly mortgage payments.
Unison doesn’t take any ownership of the home. Their co-investment is secured via a second lien.
The buyer must typically put down at least 10% of the purchase price.
The homeowner can sell their home whenever they choose. If the property is sold in the first three years, Unison doesn’t share in any decrease in value.
The homeowner may buy out Unison’s share in the home at any time after three years. An appraisal determines the current market value of the home, Unison receives a buyout payment equal to its original co-investment plus any profit it would earn if the home was sold for the appraised value.
Maximum term is 30 years. At year 30 the homeowner must pay Unison the value of its interest in the home. They can do this by selling the home or buying Unison out.
A transaction fee of 2.5% of Unison’s contribution must be paid at closing.
For additional information on Unison’s HomeBuyer product, contact Tom Banducci, Senior Loan Officer at Guaranteed Rate Mortgage at 415.813.1354;
All data, including all measurements and calculations of area, is obtained from various sources and has not been, and will not be, verified by San Francisco Examiner.
All information should be independently reviewed and verified for accuracy.
Properties may or may not be listed by the office/agent presenting the information.