Page 23 - February 2018 Disruption Report Flip Book

FANNIE MAE AND FREDDIE MAC
JAN.U-FAERBY. 2018
And if I want to buy a house, for example, and I have $200,000 cash and the bank will lend me $700,000, but I want to live in a million dollar house because it’s in the right school district and the commute is shorter, I can sell 10% of my house day one and not have payments and not have more debt and not have PMI insurance, but put down my $200,000, borrow $700,000 from the bank and sell $100,000 to Unison.
I think this fractionalization of the equity in people’s homes, their biggest asset around the world, is one of the big new things and you’ve seen Andreessen invest in some and others invest, but I think the pension funds and endowments and the people looking for more exposure to real estate will be finding these companies, fractionalizing residential equity, very exciting.
Unison offers loan products to homeowners and homebuyers. In 60 seconds, Unison can prequalify a homeowner’s application to access up to equity in their home up to 20% of their home’s market value. The homeowner will not have to make any interest or monthly payments on the loan. Instead, the homeowner shares 40% of the appreciation in the home up to 30 years in the future.
For homebuyers, Unison typically provides half of the down payment for the purchase of a home for a term of up to 30 years with no interest charges or monthly payments. In exchange, Unison’s share of the change in the value of the home is typically 35%. If the home value decreases, Unison typically absorbs a portion of the loss.
Unison’s loan products are currently available in Arizona, California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Virginia, Washington and the District of Columbia. (Lend Academy Podcast, Ron Suber Episode No. 140; www.unison.com)
How cryptocurrency can help fund affordable housing
Berkeley City Councilmember Ben Bartlett and Mayor Jesse Arreguin are teaming with UC Berkeley’s Blockchain Lab and finance startup Neighborly to evaluate how the city could
conduct an Initial Coin Offering, backed by municipal bonds, to finance affordable housing measures. Purchasers of Berkeley’s cryptocurrency could use the digital “tokens” they receive
in the ICO to shop at local establishments and (possibly) pay their rent at local participating apartment complexes. Since the ICO would be pinned to the value of municipal bonds, Berkeley’s cryptocurrency is expected to be less volatile than tokens such as Bitcoin.
“We have a jobs explosion and a super-tight housing crunch,” Bartlett said. “You’re looking at a disaster. We thought we’d pull together the experts and find a way to finance [affordable housing] ourselves. ... We have more than 1,000 homeless people, and we see funding drying up ... we have to do something.”
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