A home ownership investment is a new financial product category that addresses two huge consumer demands: It increases accessibility to home ownership and it allows homeowners to unlock a portion of their existing home equity without taking on more debt. Homeowners have traditionally financed their homes with various forms of debt. With debt, the homeowner pays interest and makes monthly payments. A home ownership investment is home financing based on partnership, and it completely changes the game. It is not debt. A home ownership investment provides cash financing to homeowners on behalf of investors seeking long-term price exposure to residential real estate. This naturally aligns the interests of the homeowner and the investor, as partners. Unlike mortgages and home equity loans, there are no interest charges or monthly payments. Instead, Unison’s investors earn a return by sharing in the change in value of the home, up or down, when the homeowner decides to sell – up to 30 years later. If the home value rises, the homeowner and the investor both profit. If the home value falls, both lose.

1. A New Era for Home Buying:
The Rise of Home Ownership Investments

2. 32
Unison invented the home ownership investment
category. In a home ownership investment, an
investor provides financing in exchange for the
opportunity to share in the gain or loss in the home’s
value when the homeowner decides to sell – up to 30
years later. There are no interest charges or monthly
payments on the financing provided. Unison made
its first investment in 2007 and over the past decade
has remained the leader and dominant player in
the category, expanding nationwide by working
with lenders, regulators, and institutional investors
to integrate home ownership investing into the
US housing finance system. What sets Unison’s
programs apart is partnership: we invest at the
same appraised value as the homeowner, the term
extends to 30 years, and we share the downside risk
and upside potential with homeowners - in unison.
Unison HomeBuyer empowers buyers to purchase
the home they want with less debt and less risk by
doubling the amount of cash the buyer has available
for a down payment. This larger down payment
makes it easier to qualify for a loan, increases
buying power, lowers the monthly payment, and/or
allows a buyer to reserve cash.
Unison HomeOwner allows current homeowners
to convert a portion of their home equity to cash
today without the added debt or payments of a
home equity loan or a home equity line of credit.
Homeowners use the money to eliminate debt,
remodel, invest for retirement, pay for a child’s
education or as a cash cushion for financial stability.
Unison Home Ownership Investors Programs

3. 54
Homeowners have traditionally financed their homes solely
with loans. But that is now changing due to the introduction
of home ownership investments -- a new way to finance a
home. Whereas a loan is a debt investment that produces
a return to the investor by charging the homeowner interest
and collecting monthly payments, a home ownership
investment is financing based on partnership and shared
incentives between the homeowner and the investor. In a
home ownership investment, an investor provides financing
in exchange for the opportunity to share in the gain or loss
in the home’s value when the homeowner decides to sell
their home. There are no interest charges or monthly
payments on the financing provided.
Unison introduced the home ownership investment
category in 2007. Over the last decade, Unison has remained
the leader and dominant player in the category and has
expanded nationwide by working with lenders, regulators,
and institutional investors to integrate home ownership
investing into the US housing finance system.
A home ownership investment can double a buyer’s down
payment cash, which can eliminate the need for costly
mortgage insurance, significantly lower the monthly
mortgage payment, increase purchasing power and enable
the buyer to comfortably afford the home they really want.
Millennials and first time buyers who are burdened with
high rent and student debt now have a way to become
homeowners, and have greater choice over important
considerations like commute, school district and home
features. For buyers who already have the required down
payment in hand, a home ownership investment enables
them to retain a significant portion of their cash.
With a home ownership investment from Unison, buyers
get the best of both worlds. They get to buy a home they like,
and they can do so without a higher monthly payment and
without tying up all their money in the home. Unison is
the bridge to home ownership for millions of Americans.
These new homeowners will start building equity with their
monthly mortgage payments and putting down roots in
their local communities.
80%Mortgage loan
The Millennial generation is now the largest generation in the
U.S., with over 80 million members. In the coming decade,
this generation will make up the majority of first-time home
buyers. Yet these young prospective home buyers are in
many cases being shut out of the housing market -- a trend
that could have negative implications not only for individuals
but also for society as a whole.
The home ownership rate is near all-time lows, in part
because Millennials have not been purchasing homes at the
same rate as previous generations. Despite some claims to
the contrary, this group does have a strong desire to become
homeowners. According to Ellie Mae, 91% of Millennials say
they intend to own a home one day. The problem is that home
ownership has been out of reach for too many of them.
This generation of home buyers is facing an unprecedented
“perfect storm” of conditions that have blocked them from
pursuing their dreams of home ownership. Many of them
are recent graduates with student loan payments that take
a deep slice out of their monthly budgets. A 2015 study by
the Institute for College Access and Success found that seven
out of ten college seniors were graduating with student loan
debt, and the average borrower owed $28,950.
At the same time, rents in most cities have been rising
quickly, leaving this generation with only a limited ability
to save money for a down payment on a home. In many
places, young professionals are spending more than the
recommended 30% of their monthly income on rent --
without getting any of the benefits of owning a home. Yet,
they don’t see home ownership as being feasible for them,
because of their rent and debt payments and the difficulty
of saving for a sufficient down payment.
“Low down payment” options are no panacea. These exotic
“more debt” offerings like 3%-down mortgages, interest-only
second loans and high loan-to-value loans with mortgage
insurance do not change the equation for many Millennials
who dream of owning their own home. These offerings
typically make it harder to qualify, don’t result in lower
monthly payments, and don’t mitigate risk to the consumer,
leaving many borrowers out in the cold.
Caught between low savings rates and rapid home price
appreciation in many housing markets, today’s prospective
home buyers are searching for a way to buy a home that
does not require waiting 10+ years to save for a 20% down
payment and comes with a mortgage payment they can
actually afford.
”More debt” solutions don’t provide relief to most of these
home buyers. That is why home ownership investments are
the wave of the future.
Problem: The Next Generation of Home
Buyers is Being Shut Out
Solution: Home Ownership
Investments Are the Future
10%your down
payment
10%
home ownership
investment
For most age groups, home ownership has dropped over the last 25 years
Data Source: US Census Bureau, Current Population Survey/Housing Vacancy Survey
90%
80%
70%
60%
50%
40%
30%
20%
10%
Less
than 25
25-29 30-34 35-39 40-44 45-49 50-54 55-59
1990 2015
60-64 70-7465-69 75 and
over
Home Ownership Rate by Age Range

4. 7
The most important part of the home ownership investment
model is that it naturally aligns the interests of the
homeowner, the end investor, and Unison, the manager who
facilitates the transaction. All parties win and lose together.
For example, the investor and the manager have a natural
incentive to help the homeowner make good decisions about
the value of home improvements. They also have incentive
to help the homeowner avoid foreclosure if they lose their
job and can’t make their mortgage payments. The following
program features are critical in promoting natural alignment
in a home ownership investment:
• Unison’s home ownership investment is not a loan.
It is a long-term investment in the property.
• There are no interest charges or monthly payments.
Unison does not receive a payment until the homeowner
decides to sell their home – up to 30 years in the future.
A true partner understands that for many people home
ownership will naturally be a long-term undertaking; a
30-year term allows the homeowner to raise a family and
enjoy a lifetime in their home without worry over
a pending financial obligation.
Shared Incentives: Why Partnership is the
Key to Home Ownership Investments
• Unison invests at today’s fair market value of the home
(as opposed to a discounted value).
• The company’s return on investment comes from sharing
symmetrically in both the upside and downside of the
home’s change in value. Typically, Unison earns a profit
if the home value rises and incurs a loss if the home
value falls.
• Unison doesn’t share in all of the home equity, only the
change in value.
• Unison does not become a co-owner in the home, just
an investor.
• Unison provides full transparency of terms and a
robust education process as the centerpiece of a highly
automated, consumer-friendly origination process.
• The success of everyone (the homeowner, investor and
manager) is directly tied to the performance of
the investment.
“The language in all of our
contracts and educational
materials is straightforward. It
can be straightforward because
complete alignment of interest
between the homeowner and
the investor is fully baked into
the deal. We establish a true
long-term partnership with
each client.”
Jim Riccitelli

5. 98
When someone buys a home using more than 80% debt,
they are often putting their investment, their home and
their family at greater risk because their monthly payments,
including mortgage insurance and fees, will be significantly
higher. By taking on these higher monthly payments, the
homeowner may be taking on a much greater risk of losing
the home through default.
In fact, studies show that the likelihood of a homeowner
defaulting and losing their home increases dramatically when
the amount borrowed exceeds 80% of the home’s value. A
high balance loan typically forces the homeowner to pay
mortgage insurance, which adds onto an already higher
monthly payment. It can be a recipe for disaster.
With the introduction of home ownership investments, there
is no longer a reason for a homeowner to put their family
and the investment in their home at risk like this, especially
given that the home is not only an investment but also
provides the basic shelter that the homeowner counts on.
Your home is the one asset you want to secure above all
others -- it should not be a place where you assume a high
degree of risk.
There is also no reason for homeowners to take on higher
monthly payments that stretch their finances and leave
them with no buffer for life’s unexpected events. Instead,
purchasers should consider using a home ownership
investment which reduces the debt on their home to 80% or
less and results in a more affordable monthly payment. That
leaves them in control, with greater ability to weather the
storm of an unexpected life event.
The benefits of a home ownership investment are clear.
By borrowing less, reducing fees, eliminating mortgage
insurance and enjoying a lower monthly payment, the
homeowner can secure their home and their investment.
They can also retain some of their cash to pay for other
important needs and the inevitable rainy day.
Homeowners: Less Risk and More
Affordable Payments
“Encouraging Americans to add
more debt is a reckless way to
increase home ownership rates.
Having a partner to invest with
you reduces your leverage and
hedges some downside risk.”
Thomas Sponholtz
0.22%
0.58%
1.
80% 90% 9
AverageAnnualizedDefaultRate
LTV at Origin
Default Rates through the Cycle (’02 – ‘09)
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
2002 2003 2004 2005 2006 2007 2008 2009
AnnualizedDefaultRate
Origination Cohort
97% LTV 95% LTV 90% LTV 80% LTV
0.22%
0.58%
1.06%
1.26%
80% 90% 95% 97%
AverageAnnualizedDefaultRate
LTV at Origination
Default Rates through the Cycle (’02 – ‘09)
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
2002 2003 2004 2005 2006 2007 2008 2009
AnnualizedDefaultRate
Origination Cohort
97% LTV 95% LTV 90% LTV 80% LTV
Default rates increase with a higher LTV
Average annualized default rates of agency mortgages originated through the
business cycle (2002-2009)
Data Sources: Fannie Mae, Freddie Mac
Annualized default rates of agency mortgages by origination year through the business
cycle (2002-2009)
Data Sources: Fannie Mae, Freddie Mac

6. 1110
Ricardo S.
Southern California
Ricardo and his wife had saved up for a down payment and
were able to afford the monthly payments, but they also
wanted to maintain their financial flexibility so they could
support their children’s educational goals and be prepared
for any emergencies that might come up.
“The main financial commitment that we prioritize as a family
is education,” Ricardo said. “During the high school years,
we placed our children in private school, which requires a
significant financial contribution from us.” But continuing to
fund the children’s education and buying their dream home
presented a challenge. A loan officer introduced Ricardo
to Unison and its home ownership investment program.
Unison offered to partner with Ricardo’s family on the down
payment, allowing Ricardo to reserve cash and still get the
lowest monthly payment because he would be putting down
a full 20%. After poring over the details and talking it over,
Ricardo and his wife decided that this was a great way for
them to purchase their dream home. “The major problem
that it solved is that it reduced the monthly payment that
we would have for the purchase of this home, which in turn
provided more financial flexibility for us to commit towards
our children’s education and other financial priorities that
we have in our lives.”
In Their Words: How People Use
Home Ownership Investment
Trevor O.
Southern California
For Trevor and his wife, being a part of their community is
a big deal. Trevor is a pastor, and as you would expect his
church and the congregation are very important to him and
his wife. The couple have been at the same church for many
years, and have developed many long-lasting connections
with people there. With their young children being involved
in the church as well, the entire family has strong ties to
their community.
While they have a great life, Trevor and his family had been
living in a condo and were starting to feel ready to move up
to a traditional home. They wanted a yard where their kids
could play -- something with more room than their condo.
But they weren’t sure about the financing.
Trevor and his wife talked with a loan officer who suggested
that they look into Unison, which could provide a portion
of the down payment through the Unison HomeBuyer
program. They realized that Unison could help them
purchase the home they wanted without taking a loan from
family members for the down payment. And their monthly
mortgage payments would still be affordable, because the
money Unison contributes is not a loan.
Now they are very happy in their new home. “It’s closer to
my work. It’s in a great community. It has a yard. This will
be a great family home for us for the future,” Trevor said. “I
appreciate so much that Unison was so thorough with the
way they educate customers so that they know exactly what
they’re getting into beforehand,” he said. “I think it’s very fair
that Unison’s not looking to take anything from me at the
time of purchase. Instead, they’ve partnered with us to make
an investment in our home, and then in the future they will
share in either the increase or decrease in the home’s price.”
“...it reduced the monthly
payment that we would have
for the purchase of this home,
which in turn provided more
financial flexibility for us...”
“I appreciate so much that
Unison was so thorough with the
way they educate customers...”

7. 1312
Institutional investment strategy is influenced heavily by
the interest rate environment. In a high rate environment,
fewer risky investments are required because lower risk
investments provide adequate returns. However, when
interest rates are low, and especially when they remain
low for very long periods of time, many institutions find
themselves underfunded and needing to take on more risk
or require additional funding in order to meet obligations.
Based on the Willis Towers Watson Pension Index, the
average US pension plan has only 73% of the assets needed
to fund its respective liabilities. In an extreme case, the city of
Detroit made US history as being the first major municipality
to declare bankruptcy, an event largely driven by the degree
to which its pension funds were underfunded (having fewer
assets than needed to meet liabilities).
Inflation is another principal driver of institutional investor
strategy. Inflation impacts the income needed for a retiree to
maintain his/her standard of living or the funds required by
an endowment/foundation to support its work.
Over 40% of inflation is determined by the cost of housing;
it is the largest component of inflation (as measured by the
Consumer Price Index) in the United States. Historically, the
only way to hedge inflation was to purchase TIPS (treasury
inflation-protected securities), which are scarce and oddly
constructed, or to purchase some proxy for inflation, be
it commodities, farmland, or infrastructure. Investments
in these assets are predicated on their historical link
with inflation, rather than them being an actual material
component of CPI. The cost of housing, however, is the
largest single direct component of inflation and is a much
simpler, purer way for an investor to protect itself from
exposure to inflation that is inherent in an institutional
investor’s’ liabilities.
Investing in housing has historically been problematic, as
the only way to access the asset class has been through
the purchase and subsequent rental of homes. Purchasing
homes as rental properties is difficult to scale, resulting in a
big expense drag on returns. Mortgages are a fixed income
investment that is collateralized by the underlying real
estate, but they have no correlation to its price movement.
While mortgages and rental properties at various times in
the market cycle can be attractive total-return investments,
neither can deliver the investment attributes for hedging or
outperforming long-dated inflation that investing in homes
directly can achieve. Inflation hedging is one of the main
investment objectives that a liability-focused institutional
investor seeks to fulfill.
U.S. single-family housing constitutes $30T in total value,
making it the largest asset class in the United States. With
approximately $162T in total value globally, it is also the
largest asset class in the world. For any large institutional
investor, making investments in all investable asset classes
is an important ingredient in consistently achieving strong
returns while taking a prudent level of risk.
These two motivations – inflation hedging and exposure to
the largest asset class in the world – make single-family real
estate very compelling to an institutional investor. Home
ownership investments are a frictionless way to invest and
not have to worry about the maintenance of the property,
tenants, or vacancies. Home ownership investments are also
attractive to institutional investors who worry about inflation
in the long-term but are rarely concerned about inflation in
the short-term. Investments that will keep up with inflation
over the long-term are scarce and in demand. For these
reasons, institutional investors are supportive of establishing
home ownership investment as a widely-accepted asset class.
Institutional Investors: Strong Demand
for Home Ownership Investments
Real Estate indexes obscure the volatility of a single real
estate property
Data Sources: BNY Mellon Long-Term Capital Market Report
2016, First American Property and Transaction Level Data
1. Case, Karl E. and Robert J Shiller. 1987. “Prices of single family homes since 1970: new indexes for four cities” National Bureau
of Economic Research.
2. Flavin, Marjorie and Takashi Yamashita. 2002. “Owner-Occupied Housing and the Composition of the Household Portfolio”
American Economic Review.
The chart above displays average household leverage for
age cohorts measured from a large sample of families across
multiple generations. While this leverage may be appropriate
when assuming housing volatility of a diversified index, our
research suggests that young homeowners are significantly
over-levered when their actual volatility (of a single home)
is taken into account.
One of the key aspects of the home ownership investment
model is that it strengthens the entire housing sector by
more efficiently distributing risk. Millions of individual
homeowners are over-leveraged in their particular homes.
Home ownership investments allow these homeowners
to reduce risk by transferring some of it to institutional
investors who can hold a diversified portfolio managed by
a company like Unison.
Having too much of your net worth tied up in one property
is a very risky investment strategy. Often, young homeowners
will own a home worth many times their savings. The ability
to diversify one’s assets away from a single, large investment,
while still retaining one’s home reduces risk for individual
homeowners and collectively for the entire housing sector.
Real estate is considered a low risk investment vehicle.
However, this is only strictly true given: (A) a diversified
portfolio of real estate and (B) a long holding period. A
homeowner lives in a single house and may not remain in
that house for a lengthy period of time. He/she is invested
in a geographically-specific, heterogeneous asset. While a
diversified index of homes (eg. Case Shiller)1
is expected to
experience around 3-4% annualized volatility, the expected
volatility of an individual home is much greater. Furthermore,
due to closing costs and other market frictions this individual
home risk is amplified in the short run. Bringing it all
together, a diversified real estate index can understate the
risk of a single home by up to five times.
On a national scale, housing is an incredibly efficient
investment. However, while homes in the U.S. tend to
appreciate, on average, somewhat consistently each
year, trillions of dollars of home equity are currently held
by individual homeowners in what amount to separate,
undiversified and heavily levered portfolios. This means
that every year many homeowners experience incredible
windfalls as their homes appreciate while others tragically
see home equity erased as their homes depreciate.
When assuming that the price of a home perfectly follows
a diversified index, the portfolio of a young homeowner
comprising 3x leverage and almost 90% exposure to
residential real estate is actually quite well supported by
modern portfolio theory, especially when the intangible
benefits of owning a home are considered2
. However, when
more realistic assumptions about the risk of an individual
home are included, the overall volatility of such an exposed
portfolio increases up to 4-5 times, with no commensurate
increase in expected return. This would raise a red flag
under modern portfolio theory.
Home ownership investments address this problem by
reducing the risk exposure of individual homeowners --
and in doing so, they reduce risk across the entire housing
market. Lenders experience less risk due to homeowners
being less leveraged. And homeowners are less likely to find
themselves underwater (where their home is worth less than
the debt against it) in case of a housing market downturn
or unexpected life event.
12%
10%
8%
6%
4%
2%
0%
AnnualizedVolatility
Diversified Index
3.5%
Single Home
12%
HouseholdLeverage
4.0x
3.5x
3.0x
2.5x
2.0x
1.5x
1.0x
0.5x
0.0x
A Stronger Housing Market: Home Ownership
Investments Reduce Systemic Risk
Data Source: Panel Study of Income
Dynamics (https://psidonline.isr.
umich.edu/)
18-30 41-50 61-7031-40 51-60 71+
3.8x
1.9x
1.2x
2.7x
1.3x
1.0x

8. 1514
Thomas Sponholtz Bio
Prior to founding Unison, Thomas spent many
years in the investment management industry
where he built and introduced several large scale,
ground-breaking products. He was the co-head
of active fixed income in Barclays Global Investors’
$130B Fixed Income Group and instrumental in
launching the first Fixed Income iShares (ETF)
at Barclay’s Global Investors. Previously at Alex
Brown, Sponholtz spearheaded the first-ever
issuance of Collateralized Mortgage Obligation
(CMO) capability in Europe in partnership with
European banks.
“More than a decade ago I could see that there were people
all over this country who couldn’t buy a home even though
they had good credit and a reliable income, simply because
they couldn’t save up enough for a down payment. First time
home buyers were frozen out of the market and forced to
rent for longer periods of time.
At that point it became clear to me that the world needed
a large-scale platform that could efficiently connect
institutional investors who want and need exposure to U.S.
residential real estate with home buyers who need capital
to purchase a home, or homeowners seeking flexibility to
pull cash out of their home without taking on additional
debt. With this massive idea in mind, I gathered a team to
build the initial consumer and investment product. When
it became time to scale the business, Jim Riccitelli joined to
help build the first large-scale operational capability for home
ownership investments. We spent the late 2000s building the
necessary investment structure, formalizing relationships with
investors and lenders, hiring a world class team, and working
with regulators and others on this revolutionary concept.
Since we were the first company to bring the home
ownership investment model to consumers, it was up to us
to carve the path within the current residential real estate,
regulatory, and financial ecosystems. There were too many
challenges to talk about here. What’s important is that we
succeeded. Today, a home ownership investment provides
cash financing to homeowners on behalf of investors seeking
long-term price exposure to residential real estate. This
combination naturally aligns the interests of the homeowner
and the investor, as partners.
All our programs are consumer-centric -- our operating
policies, procedures and education align with our customers’
interests. The core concept of the enterprise is partnership.
A cornerstone of partnership is symmetry in information
so consumer education is one of our cherished values at
Unison. Co-CEO Jim Riccitelli spearheaded the building of our
education program from the ground up. Today, our policy
is to transact only with customers that can demonstrate an
appropriate understanding of the Unison programs.
The most important part of the home ownership investment
model is that it naturally aligns the interests of the
homeowner, the end investor, and Unison, the manager who
facilitates the transaction. All parties win and lose together.”
In His Words: Thomas Sponholtz
Founder, Chairman and Co-CEO of Unison
Co-CEOs Thomas Sponholtz and Jim Riccitelli

9. Home ownership investments are the future of home buying. This new financing model
is based on partnership. As the leader and dominant player in the category, Unison is
poised to expand home ownership in the U.S. Unison’s programs make it possible for
people to buy a home they like, without a higher monthly payment and without tying
up all their money in the home, or to convert home equity to cash without debt.
Learn more about Unison:
www.unison.com
contact:
ps@unison.com or call 1-800-330-9400
©2017 Real Estate Equity Exchange. All rights reserved. Real Estate Equity Exchange, Inc., dba Unison Home Ownership Investors, offers Unison HomeBuyer Agreements and Unison
HomeOwner Agreements exclusively through its subsidiaries Unison Agreement Corp. and Unison Agreement AO Corp (“Unison”). AZ FN #F21226646, CA BRE License #2012710, CT License
REB.0791352, DC REC License #C098374562, IL DFPR License #478026863, MA BR License #422177, MD REC License #6027, NJ REC License #1649879, NY DL License #10991223540, OR REA
License #201219728, PA EN #6428873, VA REB License #0226-025731, WA DL License #19288. Unison is not affiliated with any bank or lender. Unison expressly reserve the right to modify,
change or waive certain terms and conditions upon which a Unison HomeBuyer Agreement or HomeOwner Agreement may be offered, in their sole discretion, to the extent permissible by law.
Information contained herein is made available by Unison for informational purposes only and is not intended to provide specific financial or legal advice.
Benjamin Feldman,
Director of Content
Rayan Rafay,
Managing Director,
Head of Portfolio Management
Brodie Gay,
Quantitative Strategist
Benjamin oversees the creation
and promotion of content to
educate home buyers and
illustrate how Unison can help
them accomplish their goals.
He leads Unison’s content
strategy.
Rayan oversees Unison’s
investment portfolios. He has
over ten years of investment
management experience and
is a co-founder of Investment
Frontier, an information hub for
Frontier Markets.
Brodie applies machine
learning to transform data into
actionable insights. He supports
the research and operations
teams at Unison and also helps
design the firm’s intellectual
property strategy.