A young company is working to let homeowners get cash from their home equity without ever moving.
With EasyKnock, which launched in 2016, homeowners can sell their home to the company and remain in it as tenants. They will pay rent to EasyKnock but they have the option to repurchase the home or move when they choose.
With EasyKnock's Sell and Stay program, homeowners can sell their home to the company in order to tap into the home's equity. This could be used for life events such as paying for a child's college education, a wedding or to pay off medical bills.
Through the program, EasyKnock draws up a lease with a purchase option so that the homeowner has the option to buy back their house at a later date. The lease can be renewed annually and the home is never listed. Closing takes about 30 days.
EasyKnock CEO and Co-founder Jarred Kessler said in a press release that there has been an explosion in single-family rentals in America and a large number of those homeowners are unable to release equity out of their homes.
"The addressable market for ‘Sell and Stay’ is $2.6 trillion, and this round of funding will enable us to expand our footprint and provide homeowners the flexible options they need," Kessler said in the press release.
Matthew Murphy, a partner with Montage Ventures, said in a press release that American consumers are basically sitting on more than $14.5 trillion in home equity but there aren't many options for them to access it.
"We're excited to partner with EasyKnock to offer this unique platform as it will help homeowners unlock the value of their home without having to move," Murphy said in the press release.
EasyKnock was started because the founders felt the credit requirements, as well as generational wealth shifts, have caused a decrease in home equity lending, according to the release. Since 2003, home equity lending has dropped 88 percent and many Americans are not able to access the equity in their homes when they need it, the release states.
The company plans to partner with mortgage companies to pay a referral fee for their rejected customers, according to the press release.
The company recently received $3.5 million in seed financing to help it fuel customer growth and expand to new markets.