It sounds too weird to be true: A company will pay a huge chunk of the down payment on your new home, and it won’t charge you a dime. With a Unison homeownership program, you own the home, and this company won’t bother you again – not until you sell the home.
At that point, if you make a profit on the sale, the company takes a cut – but only if you make a profit. If you don’t, this company actually shares in your loss.
That’s the business model for Unison, a San Francisco-based company that’s been around for 12 years and has been featured in national media like USA Today and Forbes.
How Unison homeownership works
What makes the Unison Homeownership program so special comes down to one word: patience. That’s not a trait of most U.S. companies, but Unison will, for instance, make 10 percent of your down payment if you make the other 10 percent.
Even if you don’t sell your home for 10 or 20 years, you owe Unison nothing. Only when you sell the home do you pay back the original amount, plus 35 percent of the profit you made on the sale. Considering you received a loan for decades, it’s actually a bargain.
Over the years you save big because of Unison. If you can make a 20-percent down payment, you don’t have to pay mortgage insurance, which can cost hundreds a month.
In addition, just the simple act of putting up more money means the mortgage payments themselves are lower.
“A homeowner could use this money while still living in the home, and dealing with other life needs,” says Michael Micheletti, Unison’s corporate communications director. “ Over the last decade, Unison has made this vision a reality.”
Meanwhile, Unison doesn’t even have an ownership stake in your house. It’s all yours, and you can paint it and redecorate it any way you want. Unison has no say.
Why it works
Because home prices are soaring – rising more than $10,000 last year. It has become increasingly difficult to make a down payment at all, much less hit the magic number of 20 percent.
Unison is unique in trying to solve this problem. It’s taken years for Unison to prove to skeptics that this business model is good for everyone.
“One of our greatest challenges is that we’re creating an entirely new financial category,” Micheletti says. “That means we have the opportunity to educate consumers not only about how this model of financing works, but also about the positive impact of owning a home.”
Unison has spent some of its money and much of its own time teaching its customers how to buy a home responsibly.
“We’ve built education into our customer onboarding process, and it’s one of our core values,” Micheletti says. “Now that the Unison homeownership program is growing quickly, we’re finding it easier and easier to show people the value we can bring them and why this can be a win-win for both sides.”
Want to learn more?
Unison provides both assistance with your down payment and alternatives to home equity loans. For more information on how to get started, click here.
