Home Equity Agreements by State: What the Law Says

Updated August 14, 2026. Quick answer: of the 51 US jurisdictions, 6 have an authority saying a home equity agreement is a mortgage loan or credit — CO, CT, IL, MD, MN, WA — and 45 have said nothing either way. That is the finding, because the product is sold nationwide. And the 6 do not belong in one column: they sit on 4 different rungs of authority, from a statute that binds every provider to a settlement that binds one company. Below: what each of the 6 actually did, what the silence of the other 45 does and does not mean, and why most state-by-state tables of this get at least 6 states wrong. What one of these agreements costs is on the true-cost page; this page is only about the law.

The six answers, and they are not the same fact

Every published table of this that we could find prints one column of yes and no. That is the wrong shape. Minnesota binds one company by injunction; Connecticut binds everyone by statute. Both are true and they are not the same fact, so the 6 are set out here by what actually stands behind the answer.

Read the rungs downward and the answer gets weaker, not narrower. The bottom rung is an allegation a company settled. The top rung is text a legislature enacted. A page that tells you your state “treats these as loans” without saying which rung it is standing on has told you almost nothing you can act on.

Connecticut legislated first, and conceded the point providers lead with

Connecticut did not wait for a court or a regulator. It defined the product in its mortgage-licensing statute:

“‘Shared appreciation agreement’ means a nonrecourse obligation in which an advance sum of monetary value is extended to a consumer, as a lump sum or otherwise, in exchange for an equity interest in a dwelling, residential real estate or a future obligation to repay a sum upon the occurrence of an event, including, but not limited to, the transfer of ownership, repayment maturity date, death of the consumer or as outlined and explicitly agreed to within said agreement;” — Conn. Gen. Stat. § 36a-485(30)

and then put that defined term inside the definition of a residential mortgage loan: “‘Residential mortgage loan’ means any loan, including a shared appreciation agreement, primarily for personal, family or household use that is secured by a mortgage, deed of trust or other equivalent consensual security interest on a dwelling or residential real estate upon which is constructed or intended to be constructed a dwelling;” — Conn. Gen. Stat. § 36a-485(27). The consequence is the licence: “No person shall engage in the business of making residential mortgage loans or act as a mortgage broker in this state unless such person has first obtained a license for its main office and for each branch office where such business is conducted” — Conn. Gen. Stat. § 36a-486(a).

Notice what that definition gives away and what it does not. Connecticut calls the obligation nonrecourse — agreeing with the sellers on the very feature they say takes it outside lending law — and treats it as a mortgage loan anyway. Being nonrecourse was never the thing that made it not a loan. The amendment that did this is on the record in the statute’s own history note: “P.A. 21-138 defined ‘out-of-state mortgage loan originator’ in new Subdiv. (22), redesignated existing Subdivs. (22) to (28) as new Subdivs. (23) to (29), amended redesignated Subdiv. (27) by adding ‘, including a shared appreciation agreement,’, defined ‘shared appreciation agreement’ in new Subdiv. (30), and redesignated existing Subdivs. (29) to (34) as new Subdivs. (31) to (36).”

Illinois and Maryland are one model text, and it is wider than Connecticut’s

Illinois and Maryland arrived after Connecticut with language that is near word-for-word identical to each other and materially broader than Connecticut’s. Illinois’ version:

“‘Shared appreciation agreement’ means a writing evidencing a transaction or any option, future, or any other derivative between a person and a consumer where the consumer receives money or any other item of value in exchange for an interest or future interest in a dwelling or residential real estate or a future obligation to repay a sum on the occurrence of an event, such as: (1) the transfer of ownership; (2) a repayment maturity date; (3) the death of the consumer; or (4) any other event contemplated by the writing. The Commissioner may define by rule and regulation any terms used in this Act for the efficient and clear administration of this Act.” — 205 ILCS 635/1-4(ccc)

Maryland’s opens with the same words — “‘Shared appreciation agreement’ means a writing evidencing a transaction or any option, future, or any other derivative between a person and a consumer where the consumer receives money or any other item of value in exchange for an interest or future interest in a dwelling or residential real estate, or a future obligation to repay a sum on the occurrence of an event such as:” — and both then use the identical operative sentence to sweep the product into the licensing regime: “‘Mortgage loan’, ‘residential mortgage loan’, or ‘home mortgage loan’ shall mean any loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling as defined in Section 103(v) of the federal Truth in Lending Act, or residential real estate upon which is constructed or intended to be constructed a dwelling. ‘Mortgage loan’, ‘residential mortgage loan’, or ‘home mortgage loan’ includes a loan in which funds are advanced through a shared appreciation agreement.” in Illinois (205 ILCS 635/1-4(f), (ccc) (Residential Mortgage License Act of 1987)), and “‘Mortgage loan’ includes a loan in which funds are advanced through a shared appreciation agreement.” in Maryland (Md. Code Ann., Fin. Inst. § 11-501(m)(2)).

Two differences from Connecticut matter, and both widen the net. Neither Illinois nor Maryland requires the obligation to be nonrecourse. And both expressly reach “any option, future, or any other derivative” — which is the language of the option-shaped structures the industry actually writes. A deal drafted to miss Connecticut’s nonrecourse trigger does not miss these two.

Maryland goes one step further than Illinois and inserts the same clause into its definition of a conventional home mortgage loan as well: “‘Conventional home mortgage loan’ includes a loan in which funds are advanced through a shared appreciation agreement.” — Md. Code Ann., Fin. Inst. § 11-501(b-1)(2).

If you go looking for the Maryland text yourself, the subsection letter has moved and most sources have not. The definition is at Md. Code Ann., Fin. Inst. § 11-501(s) in the current edition; it was lettered (r) in the 2024 and 2025 editions, redesignated when a new definition was inserted ahead of it. Every source published in those two years now points at the wrong subsection. The change is datable from the official host alone, by fetching the same path for 7 successive code editions and comparing the text:

Maryland arrived in two steps, not one: the 2024RS edition added the mortgage-loan clause and the definition; the current edition added the conventional-loan clause and moved the letter. That dates the code edition, not a public act — the official statute files carry no history note, no session law was read, and so no chapter number is claimed here.

Washington’s answer is in the chapter nobody would think to search

Washington does not name the product in its mortgage-lending definitions. It writes the words into the definition of a reverse mortgage loan, whose payment triggers are exactly how one of these agreements settles:

“(5) ‘Reverse mortgage loan’ means a nonrecourse consumer credit obligation in which: (a) A mortgage, deed of trust, or equivalent consensual security interest securing one or more advances is created in the borrower’s dwelling; (b) Any principal, interest, or shared appreciation or equity is due and payable, other than in the case of default, only after: (i) The consumer dies; (ii) The dwelling is transferred; or (iii) The consumer ceases to occupy the dwelling as a dwelling; and (c) The broker or lender is licensed under Washington state law or exempt from licensing under federal law.” — RCW 31.04.505(5)(b)

The consumer dies, the dwelling is transferred, or the consumer stops living in it. That is the settlement clause of a home equity agreement, sitting inside a statute written for a different product. In 2025 a federal appeals court applied it to a real one:

“But given the details of the particular structure of this overall arrangement, which includes a formal option as one component but effectively creates the substance of a shared-appreciation reverse mortgage, we conclude that Unison’s agreement with the Olsons sufficiently gave rise to a ‘credit obligation’ to fall within the statute.” — Olson v. Unison Agreement Corp., No. 23-2835 (9th Cir. Aug. 7, 2025)

Two limits travel with that sentence and anyone quoting it owes you both. The disposition says of itself that it is not appropriate for publication and is not precedent except as provided by the court’s own rule. And it reverses a dismissal on the pleadings — it says the claim may proceed, not that the agreement has finally been held to be a loan. It is the strongest judicial statement in the territory and it is still not a judgment.

Colorado did it without a statute, and its reasoning is the one to watch

The phrase “shared appreciation” appears 0 times in the 2.82 million characters of Colorado statute read for this table. Colorado still has an answer, because its licensing board wrote one:

“With the introduction of home equity contracts (also referred to as home equity agreements, shared appreciation agreements, and shared appreciation loans) into the financial market, the Board is issuing this position statement to clarify that a mortgage loan originator’s license is required to take an application, offer, or negotiate the terms of a home equity contract when the contract meets the definition of a residential mortgage loan.” — Colo. Div. of Real Estate, Board of Mortgage Loan Originators, Position Statement – MLO 2.0 – License Requirements for Originating Home Equity Contracts (adopted Jan. 21, 2026), applying § 12-10-702(21), C.R.S.

The board’s reasoning is the most portable sentence in the whole table: “Home equity contracts can qualify as a residential mortgage loan, requiring licensure to originate. The expectation of homeowner repayment signals that a home equity contract is a loan, not a gift, grant, or investment.” It does not depend on anything peculiar to Colorado. It applies an ordinary definition of a residential mortgage loan — “(21) ‘Residential mortgage loan’ means a loan that is primarily for personal, family, or household use and that is secured by a mortgage, deed of trust, or other equivalent, consensual security interest on a dwelling or residential real estate upon which is constructed or intended to be constructed a single-family dwelling or multiple-family dwelling of four or fewer units.” (§§ 12-10-702(21), 12-10-704, C.R.S.) — to a product that definition was written before anyone had heard of.

That is the move available to all 45 of the silent jurisdictions, and none of them needs a new law to make it. Every state has a definition of a residential mortgage loan. Colorado is the demonstration that a regulator can reach this product with the one it already has, in an afternoon, without the legislature.

Minnesota is an allegation a company settled, not a ruling

Minnesota is on the list and it is the weakest rung, which is why it is separated out rather than printed in the same column as Connecticut. What exists is a consent judgment, and the document is careful about its own status: “The AG alleges that the Unlock Entities marketed ‘Home Equity Agreements’ (‘HEAs’) to Minnesota consumers between 2021 and January 2024. The AG alleges that these HEAs were mortgage loans that charged unlawful interest rates, should have been licensed under Minn. Stat. ch. 56 or ch. 58 at the time of the transactions, and were subject to unfair and deceptive advertising practices.” — State of Minnesota v. Unlock Technologies, Inc. et al., Hennepin County Dist. Ct. File No. 27-CV-26-13610, Consent Judgment (entered Aug. 2026).

Read the verb. The Attorney General alleges. The company settled without the court deciding whether the allegation was right. What the judgment does produce is a forward-looking obligation on that one company: “If the Unlock Entities begin entering into new HEAs in Minnesota after this consent judgment is approved, they must first obtain a residential mortgage originator license from the Commissioner of the Minnesota Department of Commerce under the Mortgage Originator and Servicer Licensing Act unless they become a financial institution as defined in Minn. Stat. § 58.02, subdivision 10.” — Consent Judgment ¶ 7, citing Minn. Stat. § 58.02, subd. 10 and the Mortgage Originator and Servicer Licensing Act (Minn. Stat. ch. 58).

So a Minnesota homeowner signing with a different provider tomorrow is not protected by anything in that judgment. This is exactly the distinction that gets lost when a settlement is written up as “Minnesota says these are loans.”

What the regulating states actually require of a provider

Being inside the definition of a mortgage loan is the whole mechanism in some of these places and only the beginning of it in others. Of the 6, exactly 2 — IL and WA — impose a duty written for this product by name. The other 4 rely on the general mortgage rules, which is a real difference in what reaches you and when.

Illinois — counselling, and the borrower cannot waive it. “Sec. 5-12.5. Shared appreciation agreement consumer counseling and disclosures. (a) Notwithstanding any provision in this Act to the contrary, before taking any legally binding action on a shared appreciation agreement, the borrower or borrowers shall be provided counseling. The borrower may not waive counseling. (b) The Secretary may adopt rules relating to shared appreciation agreements, including, but not limited to, rules defining statutory terms; relating to disclosures to help consumers understand the cost, duration, and fees of the agreement, as well as potential alternatives; on the limits on the interest or other fees that may be charged to a borrower; and relating to counseling under subsection (a).” — 205 ILCS 635/5-12.5. Note what subsection (b) does: it hands the content of the disclosure regime to the regulator by rule. Until those rules exist, Illinois requires that you be counselled and does not yet say what you must be told.

Washington — seven items in writing, on a clock that starts when they receive your application. “Within three business days following receipt of a loan application for a shared appreciation mortgage, or a mortgage with a shared appreciation provision, in addition to the disclosures required by federal law or by this chapter, you must provide each borrower with a written disclosure containing at a minimum the following: (a) The percentage of shared equity or shared appreciation you will receive (or a formula for determining it); (b) The value the borrower will receive for sharing his or her equity or appreciation; (c) The conditions that will trigger the borrower’s duty to pay; (d) The conditions that may cause the lender to terminate the mortgage or shared appreciation provision early; (e) The procedure for including qualifying major home improvements in the home’s basis (if any); (f) Whether a prepayment penalty applies or other conditions applicable, if a borrower wishes to repay the loan early, including but not limited to, any date certain after which the borrower can repay the loan by paying back the lender’s funds plus accrued equity; and (g) The date on which the SAM terminates and the equity or appreciation becomes payable if no triggering event occurs.” — WAC 208-620-510(6). The trigger is worth reading twice: it is receipt of the application, not signing and not closing, so the disclosure is supposed to reach you while you can still walk away. Separately, before a final and complete application is accepted or any fee assessed: “(9) Prior to accepting a final and complete application for a reverse mortgage loan or assessing any fees, a lender shall refer the prospective borrower to an independent housing counseling agency approved by the federal department of housing and urban development for counseling.” — RCW 31.04.515(9).

Colorado — nothing written for the product, and it does not need any. Once the contract meets the existing residential-mortgage-loan definition, the general disclosure regime attaches by ordinary operation: “12-10-725. Written disclosure of fees and costs – contents – limits on fees – rules. (1) A mortgage loan originator’s disclosures must comply with all applicable requirements of: (a) The federal ‘Truth in Lending Act’, 15 U.S.C. sec. 1601 et seq., and Regulation Z, 12 CFR 226 and 12 CFR 1026;” — § 12-10-725, C.R.S.

Connecticut, Maryland and Minnesota impose no disclosure written for this product at all. For Connecticut and Maryland that negative was established by reading their chapters whole rather than by searching for what is not there, and being inside the definition of a mortgage loan is the mechanism. So if you want to be handed the percentage, the trigger and the termination date in writing, before you sign, on a deadline — there is exactly one jurisdiction that says so in those terms, and it is Washington.

What “no law here” does not mean

45 jurisdictions have no authority saying either thing, and in every one of those 45 cases the negative rests on retrieving the jurisdiction’s own law and searching it, not on failing to find a headline. 12,302,812 characters across 131 documents were re-counted from the saved files for this table. One of the 45 is weaker than the rest and is named rather than averaged in: for Georgia the only documents that could be retrieved were its banking department’s own summary pages, never the text of the statute itself, after 7 routes to it failed.

None of that means the product is exempt, lawful, or outside credit law in those 45 places. It means nobody has applied the law they already have. Several of those general definitions are broad enough on their face to reach it without amendment. Rhode Island’s: “‘Loan’ means any advance of money or credit including, but not limited to: (i) Loans secured by mortgages; (ii) Insurance premium finance agreements; (iii) The purchase or acquisition of retail installment contracts or advances to the holders of those contracts; (iv) Educational loans; (v) Any other advance of money;” — R.I. Gen. Laws § 19-14-1(12) (“Loan” definition, ch. 14 “Licensed Activities”). South Carolina’s turns on the same question the whole territory turns on: “‘Credit’ means the right granted by a creditor to a debtor to defer payment of debt or to incur debt and defer its payment.” — S.C. Code Ann. § 37-1-301(12) (“Credit”), § 37-3-106 (“Loan”), § 37-22-10 (“Mortgage loan”, SC Mortgage Lending Act), which asks whether the transaction creates a debt — precisely what the sellers say it does not.

So the honest reading of a silent state is: your regulator has not taken a position, and the definition it would use if it did is already on the books. Colorado shows how quickly that can change, and it changed without a vote.

Why most state-by-state tables of this are wrong

The phrase “shared appreciation” is in far more statute books than this product is. A table built by searching for it scores at least 6 states wrong, because the phrase is doing a different job in each one:

Massachusetts is the sharpest case, because the count is the highest and the answer is still no. Its provision defines the term inside foreclosure-relief architecture and confers a liability safe harbour on a nonprofit; it regulates nobody who sells the product this page is about. The Massachusetts definition of a mortgage loan that would have to reach it — “‘Mortgage loan’, a loan to a natural person made primarily for personal, family or household purposes secured wholly or partially by a mortgage on residential property.” (M.G.L. c. 255E, section 1 (Licensing of Certain Mortgage Lenders and Brokers, definitions)) — does not mention it at all.

The same trap runs the other way, and Maine is the case worth stating because we went looking for a yes there and did not find one. Maine reached this table carrying a reported affirmative answer, and it does not survive being read. Both titles where such a provision would have to live were downloaded whole from the legislature’s own site — 1,078,073 characters across 2 documents — and every search term returns zero, including the bare word “appreciation”, which appears 0 times in the whole of Maine’s banking and consumer-credit law. That negative is over the statutes only: Maine’s consumer-credit bureau could not be reached, and a bureau ruling would not be in the statute book. The honest statement is that no Maine statute says this.

Two states nearly moved, and a bill is never the answer

Pennsylvania and North Carolina both have live legislation that would put them on the top rung. Neither is law, so neither sets a row in the table above.

Pennsylvania — House Bill 2120, Printer’s No. 3478 (2025-2026 Reg. Sess.), proposing 7 Pa.C.S. §§ 6301-6324 — would license providers and define the product: “‘Shared equity agreement.’ As follows: (1) A nonrecourse transaction under which a shared equity provider advances a sum of money to a homeowner and, in exchange, obtains a mortgage on the residential property and either: (i) an equity interest in the residential property; or (ii) a future obligation to pay a sum that may vary based on future home value upon the occurrence of one or more subsequent conditions. (2) The term does not include a reverse mortgage transaction as defined in 12 CFR 1026.33(a) (relating to requirements for reverse mortgages).” (Proposed 7 Pa.C.S. § 6302 (HB 2120 PN 3478, not enacted)). It would also start the disclosure clock earlier than any enacted law does: “(b) Initial disclosure.–Within three business days after a homeowner inquires about a shared equity agreement, a shared equity provider shall give the homeowner an initial disclosure, in a form determined by the department, stating all of the following: (1) A mortgage lien will be placed on the residential property.” — on inquiry, not on application. Read the bill text.

North Carolina — H.B. 1211, 2025-2026 Sess. (N.C.), 1st Ed. — is drafted to defeat the naming problem outright: “Home equity investment loan or loan. – A transaction or arrangement, including an option contract, futures contract, derivative, shared appreciation agreement, shared value agreement, home equity sharing agreement, home equity investment, equity investment option, or similar agreement, however denominated, under which funds are advanced to or on behalf of a homeowner and a person obtains a right to receive from or on behalf of the homeowner, or from the proceeds of the dwelling or residential real estate, an amount determined in whole or in part by reference to the value, equity, appreciation, sale proceeds, or future value of a dwelling or of residential real estate upon which a dwelling is constructed or intended to be constructed.” (Pending H.B. 1211, proposed G.S. 53-274.2(4) (not enacted)). Its disclosure rule would run “Within 10 business days after application, and in any event not less than 20 business days before closing, a company shall provide to the homeowner all of the following and any additional disclosures required by the Commissioner by rule”. Read the bill text.

Both are worth watching and neither changes anything today. If you are reading a summary that lists Pennsylvania or North Carolina as regulating these agreements, it is describing a bill.

The federal answer is contested, and we are not going to pick one

Underneath every state row is one unresolved federal question: is this “credit” under the Truth in Lending Act? The two texts point opposite ways and both are official.

Regulation Z’s own Official Interpretations codify an exclusion that the sellers rely on: “viii. Investment plans in which the party extending capital to the consumer risks the loss of the capital advanced. This includes, for example, an arrangement with a home purchaser in which the investor pays a portion of the downpayment and of the periodic mortgage payments in return for an ownership interest in the property, and shares in any gain or loss of property value.” — 12 CFR pt. 1026, Supp. I, Official Interpretations, comment 2(a)(14)-1.viii (Regulation Z). But the same regulation’s reverse-mortgage definition describes the settlement mechanics of these agreements almost exactly: “(2) Any principal, interest, or shared appreciation or equity is due and payable (other than in the case of default) only after: (i) The consumer dies; (ii) The dwelling is transferred; or (iii) The consumer ceases to occupy the dwelling as a principal dwelling.” — 12 CFR 1026.33(a) (“Reverse mortgages” — definition of a reverse mortgage transaction). That is the route Washington’s statute takes, and the route the federal consumer regulator argued for in a 2025 brief in private litigation.

We are not going to tell you which wins, because it has not been decided and the honest position is that both texts are in force. What it means practically: whether Regulation Z’s protections apply to your agreement is an open question in 45 jurisdictions, and an open question is not a protection. The three-way comparison on how these sit against a HELOC and a home equity loan works through what that rulebook actually gives a borrower.

What we could not establish, and are not going to invent

• Georgia is the weakest row in the table and it is empty. 7 routes to the text of the Georgia Residential Mortgage Act failed; only the department’s summary pages were searchable. That is an access failure and it is recorded as one, not as a finding that Georgia has no rule.
• Regulator layers are thinner than statute layers everywhere. Statutes were read in full for most states; agency bulletins, opinion letters and declaratory rulings were checked only where the regulator’s own site was reachable. New York is the sharpest instance — its financial-services department blocked every automated request, and that department is exactly the kind of body that would publish an industry letter on this. An opinion letter could exist in a state marked silent here, and this table would not know.
• No 50-state search of court dockets was run. One federal appellate decision was found and read. State trial-court dockets were not swept, and that is where this kind of question usually surfaces first.
• A handful of rows rest on mirrors, archived captures or bill text rather than a current official codification, and carry that flag in the underlying data rather than being smoothed over.
• This page is about classification, not about whether an agreement is a good idea. A state that regulates these has not endorsed them, and a state that is silent has not warned you off. What one costs is a separate question, worked out on the true-cost page and in the calculator.
• Nothing here is legal advice about your agreement. Whether a particular contract falls inside a particular state’s definition is a question about that contract, and the answer is not on any website.

If what you are being offered is a sale of the house with a lease back rather than an equity share, that is a different product with a different rulebook: what a sale-leaseback actually is.

Sources

Every classification on this page was read at primary: state statutes, a state regulator’s position statement, a federal appellate disposition, an attorney general’s consent judgment and the Code of Federal Regulations. 95 quotations in the underlying table were machine-checked against the bytes of the document each was read from, with 0 failures. No secondary source carries a value anywhere in the data: 146 of 255 cells are valued and 0 of them rest on a secondary source.

General consumer information, not financial, tax or legal advice. Statutes, rules and pending bills are as published by the cited source on 2026-08-14 and change without notice; your own circumstances govern.