He Wanted to Create a New Way for Homeowners to Turn Their Equity Into Cash. He Ended Up Unlocking $1 Billion. Traditionally, to get cash out of their home, owners had to apply for a loan or a line of credit and make monthly payments. With HomeTap, Jeffrey Glass created a less stressful, more accessible option.

Midway through 2024, 49% of mortgaged homes in the U.S. were "equity-rich," per the real-estate research firm ATTOM, meaning that they were worth more than what their owners owed on their mortgages. Historically, homeowners in this situation have had only two ways of turning that value into cash, if they don't want to sell their homes: They could get a home-equity loan or a home-equity line of credit. But both of those options require monthly payments. This cuts into the immediate value of the money. Since many homeowners unlock their equity because they want quick access to as much cash as they can get, often in stressful times — perhaps to pay off a surprise medical bill — the traditional options regularly don't solve the problems people actually have.

Serial entrepreneur Jeffrey Glass set out to fix this mismatch with his latest company, Hometap, which launched in 2017. With Hometap, homeowners can use their equity-riches to pay off debt, start a business or otherwise problem-solve without having to sell their homes. The company's "Home Equity Investments" offer homeowners a lump-sum payment in exchange for either a slice of the home's future value or simply repayment within 10 years — eliminating the need for monthly payments.

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This year has seen a breakthrough for Hometap, which reached $1 billion in home-equity investments in January, then closed its inaugural securitization of $217 million in June. All of this made Glass a finalist on our Entrepreneur of 2024 list of 20 innovative leaders.

In January the company surpassed a billion dollars in home-equity investments. What was it like reaching that major milestone?

It was pretty surreal. To be candid, we started working on this idea for Hometap in late 2016 and back then, if you would have said, "Someday this company that you're working on would be responsible for deploying over a billion dollars and helping over 10,000 homeowners," I probably would have believed you, but there would have been with a high level of skepticism.

Did people in the industry doubt the idea behind Hometap in the beginning?

When we started working on this idea, we were trying to think about how to create a new company. But the goal was not just to create a company that could do well from a business standpoint. It really had a much loftier mission, which was to do something that could really make a difference in people's lives. If you go back to 2016, and say, "Hey, we're going to come up with an alternative to traditional loans, and instead of lending people capital, what we're going to do is we're going to make an equity investment alongside them."

Back then, if you talked to anyone from the real estate industry, which we spent a lot of time trying to learn, the answer you universally got was, "This is the dumbest idea ever." And [the criticisms] were twofold. One was, "It's gonna be too hard. Homeowners are used to taking out loans. It's what their parents did, it's what their grandparents did." And then the other part is, capital is not going to do this. Capital likes lending money, they like interest rates, and they need the regular, continuous payments. Or if you own a place and you're renting it, then you're getting the regular payments of rental income. But either way, if you're an investor, you have the benefit of the regular cash flows that come back. Whereas with the Hometap investment, the idea is we give the homeowner capital today, and sometime over the next 10 years of their current product, the homeowner gets to decide when they want to settle with us and how they want to settle with us.

When [people told us it was impossible] I knew right then and there that I was either onto something really, really smart or something really, really dumb. Knock on wood, but I think we've been onto something really smart.

As a customer, making decisions around homeownership and lending requires a lot of trust. How do you ensure that homeowners trust Hometap?

You can't be successful in selling a financial product unless somebody trusts you. You need to be able to explain it in a way that they can understand it. You really have to try to make things simple, with as few exceptions and provisions and fine print as possible.

When we were really working on different iterations of the product at the beginning, a really critical part for us was thinking about how you build something that would be easy for a homeowner to understand. Then also, of course, making sure that you build a lot of tools for transparency and understanding. A lot of it has to do with how you train your team, to make sure that your team is taking the time to help people understand how it works and why it works.

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You've started other businesses — a mail-order catalog business in college and, later, a direct-marketing business, Zooba. You've helped launch the nonprofit BUILD in Boston. And you've worked in private equity. Before launching Hometap, were you specifically looking to create something that would have a personal impact on customers?

I was. I've been very lucky. I've had some good entrepreneurial successes, and I really felt like at this stage of my career, it was more important to be building something that had a positive societal impact and was really making a difference other than just being a successful business. Now in this case, you can't really do the first without doing the second. The business has to work. It has to make sense for homeowners. There has to be a value proposition, or they won't want the product. It has to deliver appropriate risk-adjusted returns for capital, or they're not going to want to put the capital up to be able to help homeowners. All those things have to work from the business standpoint. But sitting above that, what makes all of the hard work worthwhile to me is the mission we're trying to drive: to make homeownership less stressful, and more accessible.

You mentioned making sure that your employees are aligned on the mission is really important. As a leader, how do you ensure that?

Once a month, in our all-hands, we have a couple of the teams talk about two or three different homeowner stories and situations. A lot of our team doesn't need that reminder, because if you're on the sales or operations team, you're talking to homeowners, dealing with it all day long. But I do think a part of that is sharing the stories, and I think a part of it is how we measure the business. One of our KPIs is our homeowner Trustpilot reviews. We are maniacal and religious about getting really strong Trustpilot reviews and testimonials and feedback from homeowners. If you look at the stats on our business, we've got one of the top consumer financial brands on the Internet with just thousands and thousands of five-star Trustpilot reviews. And we've got incredible Net Promoter Scores from homeowners — not only homeowners who've taken our capital, but also homeowners who took our capital and then, years later, settled with us. So we're now paid out — all the settlements are done — and they're still raving about how important we were to them and how we helped them through a tough situation.