Shared equity agreements allow homeowners to receive a lump sum of money by selling a percentage of their home equity. These agreements neither accrue interest nor have principal payments and therefore are not regulated as mortgages. Instead, the issuing entities receive a percentage of the home’s future value, unless the homeowner buys back their share of the home. These contracts can be complex, often require large balloon payments at the end of the contract term, and may impose limits on renovations, renting the property, or obtaining additional financing. Currently, there are no statutes in the Commonwealth that regulate shared equity agreements. 
 

As products tied to the sale of home equity continue to expand, it is essential that our laws keep pace. As such, we will soon introduce a Senate companion to HB 2120, a bipartisan bill introduced in the House by Representatives Arvind Venkat, Tim Twardzik, and Lindsay Powell. Our legislation creates a new chapter under Title 7 (Banks and Banking) to establish licensing requirements and regulatory standards for shared equity providers and agreements.  
 

Please join us in co-sponsoring this important legislation to provide Pennsylvanians with the protection and transparency they deserve when considering selling equity in what is commonly their most valuable financial asset, their home.