Unlock CEO Jim Riccitelli says home equity investments need ‘purpose-built regulation’

It’s no secret that older Americans have built record levels of housing wealth. And while reverse mortgage companies devote time and energy tapping into this market, they also face rising competition from a relatively new product category: shared-equity products (SEPs), also commonly known as home equity investments (HEIs).

According to research published earlier this year by the Urban Institute, more than 40% of consumers with an HEI are 55 or older. The market is small compared to traditional home equity products or reverse mortgages, but it has scaled as the three largest providers — Point Digital Finance, Hometap Equity Partners and Unlock Technologies — originated about 54,000 agreements between 2015 and 2025.

In an email interview with HousingWire‘s Reverse Mortgage Daily, Unlock CEO Jim Riccitelli goes in depth on what distinguishes SEPs from other types of financing, recent regulatory and legal efforts that target the industry, and the factors that are driving demand among homeowners of all ages.

This interview has been edited for clarity and length.

Flávia Furlan Nunes: Why do you think HEIs are now becoming a focus of regulatory and legal scrutiny? My understanding is that a key issue is whether these products should be treated as mortgages — reverse mortgages, in particular. What are the strongest arguments on each side?

Jim Riccitelli: Shared-equity products are becoming a focus of regulators simply because the industry is growing. We always expected that this scrutiny would materialize. That’s why we’ve been engaging with regulators for years, asking to be regulated.

The core issue is a regulatory mismatch. What’s happening with shared-equity products is what happens in category formation of any new and fast-growing product category. Existing rules and regulations weren’t designed for the structure of a shared-equity product, and what we’re seeing is exactly what new financial product category formation looks like: growth, scrutiny, regulatory efforts that are at times flawed and are at times good, and then clearer definition and workable solutions.

People sometimes tend to default to what they know. For example, regulators sometimes try to relate a new product or industry to preexisting regulations. In this case, some regulators are initially defaulting to mortgage regulations and interest rate-based concepts because they’re familiar to them.

One should recognize that the far stronger arguments favor treating SEPs as a distinct product class — not because the industry seeks to avoid regulation, but because purpose-built regulation actually protects consumers better than frameworks designed for a fundamentally different product structure.

Nunes: Is it accurate to market HEIs as “non-interest” products or do they effectively embed an implied interest rate?

Riccitelli: It is absolutely accurate to market and describe shared-equity products as non-interest-based products. And it would be inaccurate to market SEPs as interest-based products. The mechanics are completely different. In fact, SEPs work “backward” from how an interest rate product works.

With a loan, the interest rate is the driver of the dollar cost. Each month you multiply the outstanding principal balance by the interest rate to arrive at the amount of the monthly payment, which is the cost of the loan. And the interest rate is known upfront. Typically, it is fixed for the life of the loan.

With an SEP, there is no interest rate that drives dollar cost. There will eventually be an investment rate of return, but that percentage return cannot be known until the ending payment amount is known, which can only happen at the end of the agreement, when we know the home’s value.

That said, “no interest rate” doesn’t mean “no cost,” or “no payment obligation,” and shared-equity products are never marketed that way. In Unlock’s case, we spell out what happens in the future in explicit detail: when the agreement will end, how the calculations work to determine the ending payment, and a range of payment scenarios homeowners can expect.

Nunes: Are the primary concerns centered on the product’s structure, on marketing and disclosures, or both?

Riccitelli: The product’s structure requires clear, comprehensive explanation, but structure itself isn’t the issue. The legitimate concern is disclosure quality and consistency across the market. Not every provider explains the product the same way.

The providers that are serious about addressing this — such as the companies in the Coalition for Home Equity Partnership (CHEP) — understand that the appropriate disclosure method is to provide cost-scenario tables in plain language. The Urban Institute reached the same conclusion, and the disclosure framework it recommended in its recent report is largely what Unlock already does.

Nunes: What steps, if any, has Unlock taken to address these concerns or comply with various state requirements — like in Maine, for example?

Riccitelli: Let’s start by saying that Unlock has never conducted business in Maine and neither has any other shared-equity originator.

Recent articles stated that Maine was the first state to pass legislation to regulate shared-equity products. Maine is actually the fourth state to pass legislation on shared-equity products. Connecticut was first, about five years ago, followed by Maryland and Illinois. SEPs are being offered today in all three of those states, in compliance with the laws that were passed in those states.

Unfortunately, Maine’s law was modeled on mortgage loan statutes without adequate adjustment for the structural differences that make shared-equity products work. The result is a framework that cannot be operationalized — not because the goal of consumer protection is wrong, but because the wrong tool was applied to the job. So you will not see any shared-equity products offered in Maine, and Maine homeowners will unfortunately not have the opportunity to avail themselves of the benefits they offer. CHEP hopes that perhaps, in the future, that situation may change.

Other states have created a workable regulatory environment by either passing legislation, writing rules or providing guidance. In those states, Unlock has obtained licenses, modified disclosures, or changed operating practices as needed to operate in full conformity. Illinois is perhaps the best example of this, where the regulator engaged deeply with stakeholders and produced the most comprehensive set of rules for shared-equity products to date.

Nunes: How widespread is customer distress at this point? Are there confirmed cases of foreclosures or forced sales tied to these agreements?

Riccitelli: None of the five originator members of CHEP has ever initiated a foreclosure.

We do know that homeowners are indeed in distress from an “economic squeeze” standpoint and need another option to tap their home equity to survive in today’s economy.  The cost of home insurance is up 100% in some places. Property taxes are up 30% to 60% in high-appreciation markets. Health care costs are way up. Child care exceeds in-state tuition in most states. And wages are generally not keeping pace with rising costs.  So yes, there is a lot of homeowner distress. Their monthly budgets don’t balance.

Meanwhile, millions of homeowners are sitting on record amounts of home equity. Tapping equity with a mortgage refinance or home equity line of credit (HELOC) adds a monthly payment that can make a homeowner’s situation worse. A shared-equity product converts trapped equity into liquidity without compounding the squeeze — and for some homeowners, that’s exactly the product this moment calls for.

Independent research, including recent work from the Urban Institute, shows that SEP users are not disproportionately concentrated in vulnerable or at-risk populations. Borrower profiles are often more prime than critics assume; our internal research shows that 66% of homeowners who funded with Unlock could have qualified for a mortgage product.

Those homeowners chose a shared-equity product not because they couldn’t access traditional credit, but because they didn’t want to add a monthly payment obligation. That’s a legitimate financial preference, not evidence of targeting or distress.

Nunes: What is the current level of secondary market appetite for these products?

Riccitelli: What you’re seeing is a transition from an emerging product to an institutional asset class: more capital, more structure and higher standards.

Capital market appetite fluctuates as it does for any product, but the long-term trend is positive as more investors understand how the product works and its benefit to homeowners. In 2025, we saw approximately $2.2 billion in rated securitizations across 11 deals, with growing participation from insurance companies, pension capital and new warehouse lenders.

But here’s the really important point: There is a significant risk premium embedded in the cost of capital for shared-equity products, as with any new asset class, and this risk premium is primarily due to regulatory uncertainty. Over time, as we move toward regulatory certainty, the cost of capital will come down. That savings will be passed on to homeowners, which will increase the benefits and utility of the product. Creating that regulatory certainty, and bringing down the cost of capital, is the industry’s goal.

Nunes: Do you believe existing laws are sufficient to govern HEIs, or does this situation highlight a need for new legislation?

Riccitelli: Many of the most important existing mortgage laws are incompatible with shared-equity products. That’s why we at Unlock, and other CHEP members, have been working with regulators to promote the creation of appropriate regulations for several years.

The overall high-level framework for mortgage regulations (licensing, reporting, caps on costs and fees, disclosure requirements, prohibitions on false advertising, rescission rights, etc.) is exactly what is needed for shared-equity products. But the detailed mechanics of the regulations within that framework weren’t designed for SEPs, so they need to be tailored.

We aren’t saying, “don’t regulate us.” We’re asking for a comprehensive set of regulations, similar in scope and spirit to mortgage loan regulations, that fit the unique mechanics of our products, and provide an appropriate blanket of protection to consumers.

Nunes: What is the outlook for the HEI market in 2026?

Riccitelli: Shared-equity products are becoming a durable, defined part of the home equity ecosystem, driven by structural demand, not short-term rate dynamics. The fundamentals are strengthening and 2026 is about continuing to scale the category responsibly.

Amid record levels of home equity and tappable equity, we have continually rising consumer debt due to household cost pressures. Some homeowners need liquidity for essential life needs, whether it’s to cover health care or education expenses, an astronomical rise in child care costs, property taxes and insurance, or home maintenance and improvement costs.

These aren’t discretionary expenses. The reality is that homeowners need liquidity, and the traditional options either require surrendering a low mortgage rate or adding monthly payments that compound the very problem they’re trying to solve. They need options to meet core financial needs.

In 2026, we see continued growth for the shared-equity industry (projections of more than $5 billion), with more institutional capital, more operators, and increased investment in brand and distribution. What unlocks the next phase of the industry will be continued improvements in consumer education, standardized disclosures and regulatory clarity.