Key Takeaways
- HEIs can be easier for self-employed homeowners to qualify for because they typically require less strict income verification than HELOCs or home equity loans.
- Approval is driven more by your home’s equity, value, and market than by perfectly consistent tax-return income.
- The tradeoff is long-term: HEIs avoid monthly payments, but you’ll usually share future home appreciation when you settle the agreement.
If you’re self-employed, you already know the problem: your income might be strong, but your paperwork doesn’t always tell that story.
Tax returns can look “too low” because you write off legitimate business expenses. Your income might fluctuate seasonally. Or you might be thriving now but not have a clean two-year track record yet. And unfortunately, traditional lenders tend to treat all of those situations as risk.
That’s where a Home Equity Investment (HEI) can be different.
An HEI is not a loan, which means it doesn’t rely on the same approval logic as a HELOC or home equity loan. Instead of focusing primarily on whether your income supports monthly payments, HEI companies focus on the value of your home and how much equity you have.
For many self-employed homeowners, that makes an HEI one of the most realistic ways to access cash, especially when income documentation is messy, irregular, or heavily reduced by deductions.
In this article (Skip to...)
- What Is a Home Equity Investment (HEI)?
- Why HEIs can be easier for self-employed borrowers
- Do HEI companies verify income?
- What HEI companies actually look at (if you’re self-employed)
- What if you’ve been self-employed for less than two years?
- The big tradeoff: HEIs don’t have payments, but they aren’t “cheap”
- When an HEI makes the most sense for self-employed homeowners
- The bottom line
- FAQs: Getting an HEI When Self-Employed
What Is a Home Equity Investment (HEI)?
A home equity investment is a cash-for-equity swap.
An HEI company gives you a lump sum upfront, and in return, you agree to share a percentage of your home’s future value. You settle the agreement later when you sell, refinance, or buy the investor out (often within 10 to 30 years, depending on the contract).
The reason this matters for self-employed borrowers is simple: There’s no monthly payment.
That removes one of the biggest underwriting obstacles self-employed borrowers face: proving stable, predictable income to support a new monthly obligation.
What experts are saying
Michael Gifford, CEO of Splitero
“Most homeowners want three things: easy qualification, no monthly payment, and clarity on what they’re giving up — and that’s where an HEI really stands apart. Most homeowners now have 50% or more equity in their home, but rising rates make traditional borrowing unattractive or impossible.”
Verify your loan eligibility. Start here
Why HEIs can be easier for self-employed borrowers
Traditional lenders don’t just want to know that you earn money. They want to know that you earn money in a way that’s easy to verify, consistent on paper, and likely to continue.
Self-employed income often fails that test, even when the borrower is financially healthy.
HEI companies evaluate risk differently. They’re investing in the property, not lending based on monthly repayment.
Your income still matters, but it’s usually not treated as the main gatekeeper.
Do HEI companies verify income?
Yes but usually not in the same strict way a HELOC lender does.
Most HEI companies still want to confirm you have the ability to maintain the home and keep key obligations current, such as property taxes and homeowners insurance. They also want confidence that you’re financially stable enough to remain in the home during the term.
However, the process is typically more flexible for self-employed borrowers because HEIs don’t require a monthly debt payment.
So instead of needing perfect tax-return income, the provider may be more open to alternative signals of stability, such as:
- bank statements showing consistent deposits
- proof of business longevity
- overall equity strength
- a clean housing payment history
This is one of the biggest reasons self-employed borrowers look into HEIs in the first place.
Verify your HELOC eligibility. Start here
What HEI companies actually look at (if you’re self-employed)
Even though HEIs are more flexible than loans, approval still isn’t automatic. HEI companies still have underwriting standards — they’re just different from banks.
Here are the factors that tend to matter most.
Home value and equity come first
For an HEI, the home is the investment.
Most HEI companies want a meaningful equity cushion. If you’re highly leveraged or recently bought with a low down payment, you may not qualify even if your credit and income are strong.
Property location and marketability matter more than most people expect
HEIs are not offered in every market, and many providers restrict certain property types or regions.
If your home is in a market the company considers hard to price or hard to resell, that can be a denial reason, even if everything else looks good.
Credit still matters, just not in the same way
HEIs are often more accessible for borrowers with imperfect credit, but credit score is still part of the evaluation.
Many HEI companies accept lower scores than traditional lenders, sometimes in the 500–620 range depending on the provider. If your credit is very low, you may still qualify, but you may receive less favorable terms.
Your “paper income” may matter less than your overall stability
This is where self-employed borrowers get the most relief.
Even with a healthy cash flow, a bank may look at your tax returns and conclude you don’t make enough. HEI companies are often more willing to look at the bigger picture, especially if your housing payment history is strong and your equity position is solid.
What if you’ve been self-employed for less than two years?
This is one of the most common pain points in traditional lending. Many lenders want a two-year self-employment history, even if you were previously in the same industry as a W-2 employee.
HEIs can sometimes be more flexible here, because the approval is not centered on a two-year income average. If your equity and property profile are strong, a shorter self-employment history may not be a dealbreaker.
That said, a brand-new business can still raise risk concerns, especially if your financial profile is already tight.
Verify your borrowing eligibility. Start here
The big tradeoff: HEIs don’t have payments, but they aren’t “cheap”
HEIs can be a powerful option for self-employed homeowners because they avoid the strict income verification and monthly payment structure of a loan.
But the cost of an HEI shows up later.
Instead of paying interest each month, you give up a share of future home value. If your home appreciates significantly, the buyout cost can be higher than many homeowners expect.
This is especially important for self-employed borrowers who plan to stay in the home long-term. The longer the agreement runs, the more appreciation you may end up sharing.
Time to make a move? Let us find the right mortgage for you
When an HEI makes the most sense for self-employed homeowners
For self-employed borrowers, HEIs tend to work best in a few common situations.
That last point matters. HEIs can be extremely useful, but they’re not ideal for every long-term homeowner.
The bottom line
If you’re self-employed and struggling to qualify for a HELOC or home equity loan, a Home Equity Investment can be a more accessible alternative.
HEI companies usually focus more on your home’s value, equity, and market than on strict tax-return income verification, which is often where business owners get stuck.
Just make sure you understand the long-term tradeoff: HEIs don’t require monthly payments, but you’ll typically share a portion of your home’s future appreciation when the agreement ends.
FAQs: Getting an HEI when self-employed
Yes. Many HEI companies work with self-employed homeowners, and approval often depends more on home equity and property profile than traditional income verification.
Some may request tax returns, but HEI underwriting is often less dependent on tax-return income than HELOC underwriting since there’s no monthly payment.
It can be. HEIs may be easier to qualify for if your income is hard to document, but they come with the tradeoff of sharing future home appreciation.
Requirements vary by company, but HEIs often accept lower credit scores than traditional home equity loans, sometimes in the 500–620 range.
The main downside is cost over time. If your home appreciates, you may owe significantly more than you received upfront when the agreement ends.
