Homeowners looking for cash without taking on a traditional monthly loan payment are increasingly being offered another option: home equity agreements.

These products can provide money upfront in exchange for a share of the home's future value. They are often marketed as alternatives to home equity loans, HELOCs, cash-out refinances, or reverse mortgages.

But a new federal class-action lawsuit filed in Massachusetts is raising fresh questions about whether consumers fully understand how expensive these agreements can become.

On August 5, 2026, the National Consumer Law Center announced a lawsuit against Unison Agreement Corporation and affiliated companies on behalf of two Massachusetts homeowners. The complaint alleges that Unison marketed its home equity product as having “no debt,” “no interest,” and no monthly payments while structuring agreements that could result in substantial future settlement obligations.

Unison disputes have not been resolved in this case, and the allegations remain unproven.

Still, the lawsuit arrives amid broader regulatory concern about a rapidly growing category of financial products that can be difficult to compare with traditional borrowing.

What Is a Home Equity Agreement?

A home equity agreement—also called a home equity investment, shared equity agreement, or home equity contract—allows a homeowner to receive cash today in exchange for a contractual claim tied to the future value of the property.

Unlike a traditional HELOC or home equity loan, these products may not require monthly principal or interest payments.

Instead, the homeowner typically owes a lump-sum settlement when the agreement ends or when a triggering event occurs, such as selling the home.

The Consumer Financial Protection Bureau describes these products as contracts in which homeowners receive an upfront payment and later repay an amount based partly on the home's value. Terms commonly last 10 to 30 years.

That structure can make the product attractive to homeowners who:

• Need cash but want to avoid another monthly payment

• Have limited income

• Have weaker credit

• Want to consolidate debt

• Need money for home repairs

• Want to supplement retirement income

But the absence of a monthly bill does not mean the agreement is free.

How Unison Describes Its Product

Unison currently markets its equity sharing agreement as a way for homeowners to access cash with “no monthly payments” and “no interest.”

Its website explains that homeowners receive money upfront and later repay the original amount plus or minus Unison’s contractual share of the change in the home's value. Unison also notes that repayment generally occurs as a lump sum and that the home's change in value determines whether the agreement is more or less expensive than a traditional loan.

That distinction is central to the current dispute.

The plaintiffs argue that marketing focused on the absence of interest or debt did not adequately communicate the potential economic cost of the agreement.

Unison's current materials, meanwhile, describe the product as an equity-sharing arrangement rather than a traditional interest-bearing loan.

The court will ultimately have to decide which legal rules apply to the agreements at issue.

The Massachusetts Lawsuit Focuses on Two Homeowners

The case was filed in the U.S. District Court for the District of Massachusetts on behalf of plaintiffs Anne Cuvellier and David Hills.

According to the complaint summarized by NCLC, Cuvellier, a 68-year-old social worker, originally received an advance of approximately $57,137.

After fees and required debt payments were deducted, NCLC says she received approximately $36,329 in net cash.

The lawsuit alleges that she granted Unison a 70% contractual stake in her home's value under the applicable formula. NCLC says Unison estimated that her settlement obligation could be as high as $241,651 as of September 30, 2025.

The second plaintiff, David Hills, allegedly received approximately $61,851 in net proceeds. NCLC says his agreement similarly involved a 70% stake and that estimated settlement figures ranged from approximately $236,301 to $331,103.

These amounts are allegations contained in the lawsuit.

The court has not determined that these figures represent unlawful charges, that Unison violated consumer-protection laws, or that the plaintiffs are entitled to damages.

Why Repayment Can Grow So Much

Home equity agreements do not usually calculate cost the same way a conventional loan does.

A mortgage or HELOC generally charges interest on the amount borrowed.

A home equity agreement may instead use formulas involving:

• The original cash advance

• The home's starting value

• The home's value at settlement

• An appreciation-sharing percentage

• A valuation adjustment or discount

• A multiplier

• A contractual return cap

• Fees

The CFPB warns that this can make repayment difficult to predict when the agreement begins.

If home prices rise significantly, the company's contractual share can increase along with the property's value.

That means a homeowner who received a relatively modest cash payment years earlier could owe substantially more when the agreement is eventually settled.

No Monthly Payment Does Not Mean No Financial Obligation

The marketing appeal of home equity agreements often centers on cash flow.

A homeowner may receive tens of thousands of dollars without adding another required monthly payment.

For someone living on fixed income or already carrying significant debt, that can appear more manageable than a HELOC or home equity loan.

But the financial obligation has not disappeared.

It has been deferred.

The homeowner generally remains responsible for:

• Property taxes

• Homeowners insurance

• Maintenance

• Existing mortgages

• Repairs

• Selling expenses

The home equity agreement itself must eventually be settled as well.

The CFPB notes that consumers may need to pay the entire settlement amount at once when the term ends or another contractual trigger occurs.

The CFPB Has Already Raised Concerns About These Products

The Massachusetts lawsuit is not the first warning about home equity agreements.

In January 2025, the Consumer Financial Protection Bureau published a market review examining home equity contracts.

The agency found that the market was still relatively small but expanding rapidly.

Among its concerns:

• Consumers may have difficulty understanding the repayment formula.

• Disclosure formats are not standardized.

• Settlement amounts can be much larger than the original cash payment.

• Some consumers reported difficulty refinancing because of the contract.

• Some homeowners said they believed selling their home was their only practical way to repay.

• Agreements may be expensive compared with other home-secured financing options.

The CFPB estimated that, under some contract structures, settlement amounts can effectively grow at rates equivalent to approximately 19.5% to 22% annually during the early years.

That does not mean every agreement produces that result.

Terms differ considerably by provider, property appreciation, contract structure, and settlement timing.

But it demonstrates why comparing only the monthly payment can be misleading.

Home Appreciation Can Become a Major Cost

Homeownership is one of the primary ways households build wealth.

When a property increases in value, that appreciation usually belongs to the homeowner.

A home equity agreement changes that relationship.

In exchange for upfront cash, the homeowner agrees to share some portion of future value or appreciation with the provider.

That can create an opportunity cost that is easy to underestimate.

Imagine receiving $50,000 from an equity agreement when your home is worth $500,000.

If the home later appreciates substantially, the agreement's settlement amount could consume a meaningful portion of the additional equity created during those years.

The homeowner still owns the property, but not necessarily all of the future economic benefit.

The Risk May Be Greater for Older Homeowners

The CFPB found that the median home equity contract customer in the data it reviewed was in their 50s.

These products may also appeal to older homeowners who have substantial equity but limited monthly income.

That can create a particular planning challenge.

A retiree may use home equity to:

• Pay medical bills

• Consolidate debt

• Make repairs

• Supplement income

• Delay selling the home

But home equity may also be one of that household's largest remaining assets.

Giving up a significant share of future home value could affect:

• Retirement security

• Long-term care planning

• The ability to move later

• Estate planning

• Inheritance

• Remaining housing options

A decision that improves cash flow today can therefore alter long-term household wealth.

Refinancing Can Become More Complicated

Another risk identified by the CFPB involves refinancing.

Home equity agreements are generally secured through an interest in or lien connected to the property.

That means a homeowner seeking to refinance an existing mortgage later may need to address the equity agreement first or obtain the company's cooperation.

Consumers have complained that these arrangements made refinancing more difficult.

This matters because refinancing is often one of the strategies homeowners rely on when interest rates decline or when they want to restructure debt.

A financing decision made today can therefore limit flexibility years later.

Selling the Home Can Trigger the Settlement

Many home equity agreements must be repaid when the property is sold.

That means the agreement directly affects how much money the homeowner receives at closing.

Consider a homeowner who expects to use sale proceeds to:

• Purchase another home

• Fund retirement

• Move closer to family

• Pay for long-term care

• Leave money to heirs

If a substantial portion of the property's value must first be paid to an equity-sharing provider, the homeowner may have considerably less money available than anticipated.

This is another reason consumers should model multiple home-price scenarios before signing an agreement.

Home Equity Agreement vs. HELOC

The two products solve similar problems but operate very differently.

A HELOC generally:

• Charges interest

• Requires monthly payments

• Uses a variable interest rate in many cases

• Allows borrowers to repay principal over time

• Has standardized credit disclosures

• Requires borrowers to qualify based on underwriting criteria

A home equity agreement may:

• Require no monthly payment to the provider

• Avoid a stated interest rate

• Require a future lump-sum settlement

• Base repayment partly on home value

• Allow consumers with weaker income or credit profiles to qualify

• Produce an uncertain total financing cost

Neither structure is automatically better.

A homeowner with limited monthly cash flow may value the absence of payments.

Another homeowner may prefer predictable interest charges rather than giving up future equity.

The important comparison is total cost and long-term financial impact, not simply today's monthly payment.

Consumers Should Model Multiple Scenarios Before Signing

Because home equity agreements depend on future home values, consumers should avoid evaluating them using only one projection.

Before entering an agreement, consider asking for settlement estimates assuming:

• The home does not appreciate

• The home rises 3% annually

• The home rises 5% annually

• The home rises substantially faster

• The agreement is settled after five years

• The agreement is settled after 10 years

• The homeowner remains until the end of the term

Also ask:

• What fees are deducted from the initial payment?

• What percentage of appreciation or value is owed?

• Is there a maximum settlement amount?

• Can the agreement be repaid early?

• Are partial payments allowed?

• What happens if the home decreases in value?

• What happens after renovations increase the property value?

• Will the contract interfere with refinancing?

• What events trigger immediate repayment?

• What happens if the homeowner dies?

Those answers should be understood before home equity is exchanged for cash.

Compare Traditional Alternatives Too

A homeowner considering an equity agreement should also compare other ways of accessing money.

Alternatives may include:

• HELOCs

• Home equity loans

• Cash-out refinancing

• Personal loans

• Reverse mortgages for eligible older homeowners

• Selling or downsizing

• Assistance programs for specific financial needs

Each alternative carries different costs and risks.

A HELOC creates monthly payments and variable-rate exposure.

A cash-out refinance may replace a favorable existing mortgage rate with a higher one.

A personal loan may charge higher interest.

A reverse mortgage has its own fees and requirements.

The goal is not finding a product with no disadvantages.

It is identifying which combination of cost, risk, flexibility, and repayment obligations best fits the household's financial situation.

The Lawsuit Is Part of a Larger Regulatory Debate

NCLC has argued that home equity agreements should generally be regulated as mortgage credit, while providers have historically described many of these arrangements as investments or contracts rather than loans.

Courts and regulators are increasingly being asked to determine which framework should apply.

That distinction matters because mortgage lending laws typically carry extensive requirements involving:

• Licensing

• Disclosures

• Underwriting

• Interest-rate limits

• Consumer protections

• Foreclosure procedures

The Massachusetts lawsuit alleges that Unison's agreements should have been subject to several state lending and consumer-protection requirements.

Those claims remain pending.

The Most Important Number May Be the Future Payoff

Home equity agreements can appear simple at the beginning.

A homeowner needs cash.

The company provides it.

There is no monthly payment.

But the real financial decision is not determined by the amount received today.

It is determined by what the homeowner may have to give up later.

For anyone considering one of these agreements, the most important question may therefore be:

“What could this cost me if my home appreciates significantly over the next five, 10, or 20 years?”

That number—not the absence of a monthly payment—is what determines whether the agreement ultimately supports or weakens the homeowner's financial position.

Know What Your Home Equity Is Worth Before You Use It

Home equity can represent years—or decades—of household wealth.

Before using it to solve a short-term financial need, it helps to understand how that decision fits alongside debt, credit, retirement, housing costs, and long-term goals.

Copiafy gives you one organized place to manage financial documents, credit, bills, goals, and your broader financial picture so you can make major decisions with more context.

Your home may be one of your largest financial assets. Treat decisions involving its equity accordingly.

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