NatEquity analysis compares home equity products for senior homeowners

An analysis from California-based lender NatEquity Inc. examines the growing range of home equity products available to homeowners ages 62 and older — including traditional reverse mortgages, senior home equity lines of credit (HELOCs), home equity investments (HEIs) and the company’s proprietary HouseMoney product.

The analysis — developed for mortgage industry professionals and shared with HousingWire‘s Reverse Mortgage Daily (RMD) — compares product structures, costs, repayment terms, servicing models, investor considerations and long-term viability.

It comes as lenders and investors continue to explore alternatives to federally insured Home Equity Conversion Mortgages (HECMs), which were surpassed by proprietary products in the first quarter of 2026 in terms of funded volume.

According to NatEquity’s analysis, conducted by CEO Peter Mazonas, HECMs remain the most established senior home equity product, having been introduced in the late 1980s through a program administered by the U.S. Department of Housing and Urban Development (HUD).

Senior HELOCs and HEIs largely emerged following the 2008 financial crisis as the market developed new ways for homeowners to access housing wealth outside of federally insured programs.

The comparison highlights differences in how each product provides access to equity:

• HECMs generally allow borrowers to access a portion of their home value through a lump sum, monthly payments or a line of credit, with repayment typically deferred until the borrower dies or permanently leaves the home.
• Senior HELOCs provide revolving access to credit, often with variable interest rates.
• HEIs generally provide an upfront payment in exchange for a share of future home price appreciation.
• HouseMoney combines an upfront advance with monthly payments tied to changes in the cost of living, according to NatEquity.

Mazonas said product structures can affect how much equity remains for borrowers and their heirs over time.

“What a senior HELOC does is it starts charging interest at a fairly high rate from the beginning of the loan, and your interest is building up, accumulating and compounding,” Mazonas told RMD. “Basically, you’re eating up the home value on money that was borrowed for a good purpose, but the interest is what catches up to you.”

He added that shared-appreciation products approach costs differently by exchanging future home value growth for access to funds.

The comparison also examines the costs associated with each product. HECMs generally include interest rate charges and annual mortgage insurance premiums, while senior HELOCs carry variable interest costs. HEIs rely on appreciation-sharing arrangements, which can increase costs if home prices rise significantly.

NatEquity’s report also addresses regulatory and legal questions surrounding newer home equity products, including whether some HEI agreements could be considered reverse mortgages under state or federal law.

Mazonas said recent litigation involving HEI providers has centered on whether certain contracts with older homeowners function as loans rather than investments.

“Any loan made to a senior who’s 62 or older is considered by state statute, maybe federal statute, to be a reverse mortgage,” he said, referring to legal challenges involving shared-equity providers.

He pointed to cases involving HEI providers that have settled before courts issued rulings on whether the products should be classified as reverse mortgages subject to additional consumer protections.

The document references court decisions and industry research on these issues, although its conclusions reflect NatEquity’s interpretation of the evolving regulatory environment.

Beyond borrower features, the comparison evaluates how products are serviced and financed. It notes that HECMs are securitized through Ginnie Mae programs, while many HELOCs and HEIs are held through private investment structures.

NatEquity said servicing models can influence borrower experience, particularly for older homeowners who may use home equity products over extended periods.

Mazonas, who has spent more than three decades in the reverse mortgage industry, said the market has increasingly focused on products that are easier to securitize and sell to investors.

“Over the last 35 years, the whole industry has gone to quicker, easier-to-sell, higher-dollar-amount loans which are easier to securitize and sell to private equity,” he said.

NatEquity also pointed to lessons from previous home equity lending cycles, including the senior HELOC expansion of the 2000s. The company said roughly $400 billion in HELOCs eventually reset into short-term amortizing loans that many borrowers were unable to refinance.

The comparison concludes that demand for additional senior home equity options is likely to grow as older homeowners seek ways to access housing wealth. The assessment reflects NatEquity’s views and its positioning of HouseMoney within the broader home equity market.

This article was written by Sarah Wolak and generated with the assistance of HousingWire Automation, then reviewed by a HousingWire editor before publication.