iStock illustration

Boston-based financial technology firm Hometap, which provides a loan alternative for tapping into home equity without taking on debt, has received $245 million in capital commitments to its investment fund.

Hometap said that it had received the capital commitments to its latest institutional asset investment fund from investors including Bain Capital and Group 1001’s Delaware Life Insurance Co. The new fund is Hometap’s third and largest institutional investment vehicle, the company said, adding that the company has recently gone through a period of growth and expansion.

Hometap allows homeowners to receive debt-free cash in exchange for a share of the home’s future value. When the home sells or the homeowner settles the investment, Hometap is paid an agreed-upon percentage of the sale price or current appraised value.

“While homeowners have been fairly limited in the past when it comes to financing options, the landscape is changing for the better, with innovative solutions emerging that prioritize flexibility and ease. We’re excited to be able to offer more homeowners a fast, debt-free alternative that will deliver on our mission to make their lives less stressful,” Hometap CEO Jeffrey Glass said in a statement. “We’re also thrilled to be building an attractive asset class that provides both diversification and inflation-hedging benefits for institutional investors. It’s incredibly rewarding to work with capital partners who are as committed to helping homeowners, supporting our mission, and doing good in the world as we are.”

Hometap said its third institutional fund is designed to expand its product to more U.S. homeowners while letting investors diversify their portfolios and participate in the U.S. residential real estate asset class.

“We believe Hometap provides homeowners with a compelling, debt-free financing alternative and investors with a diversified, attractive relative value way to make a long-term investment in U.S. residential assets,” David DesPrez, director at Bain Capital, said in the statement. “We are proud to partner with the Hometap team as they bring value to more homeowners across the country.”