Elizabeth B. is an Inglewood, California, homeowner that had the opportunity to take out a Home Energy Renovation Opportunity (HERO) loan to make energy-efficient home improvements to her house. She used the funds to update the home’s windows, paint, and to add solar panels to the roof. Built in the 40’s, the three-bedroom home was in need of an efficiency refresh, but the HERO loan came with high interest rates, so Elizabeth was looking to refinance to pay off the debts.
A HERO loan is generally repaid through property tax payments, which means there is a tax lien on the property. Often, HERO loans, currently only available in California, Florida, and Missouri, can have interest rates as high as 8.99% for a 25 year term.
Looking to pay off her HERO loan, Elizabeth considered refinancing her home. She didn’t realize that refinancing with tax lien was next to impossible.
“It is harder to refinance because of the lien they have on your home,” she said.
The Federal Housing Finance Agency prevents Fannie Mae, Freddie Mac, and the Federal Housing Administration from refinancing homes with a tax lien.
So she switched her focus from refinancing to alternative solutions, and that’s when she found Hometap. When she began the online application, she was wary. It seemed “too good to be true,” she recalled.
“The process was much easier and less hassle than a traditional refinancing,” said Elizabeth. After receiving a call from her Investment Manager to go over the details of the process, she was confident that Hometap was the right move.
In just a few weeks time, she had her investment in-hand. Her Hometap Investment allowed her to access her equity and pay off her HERO loan, effectively removing the tax lien on her home.
“I was able to not only pay off my remaining debt faster, but I was also able to put more money in savings,” said Elizabeth. “I’m also able to pay more money into my mortgage each month.”
Her advice to other homeowners facing debt stress? “If you don't qualify for—or don’t want—a HELOC or refinancing, consider Hometap,” she said. “The process is very pleasant and easy.”