Harrisburg, PA – State Senators Nick Pisciottano (D-Allegheny) and Nikil Saval (D-Philadelphia) have circulated a co-sponsorship memo for legislation regulating shared equity agreements in Pennsylvania, establishing consumer protections and oversight for a growing financial product tied to homeownership.
Shared equity agreements allow homeowners to receive a lump sum of money in exchange for a percentage of their home’s future value. Unlike traditional mortgages or home equity loans, these agreements do not accrue interest or require monthly principal payments. Instead, the provider receives a share of the home’s appreciated value when the agreement ends or the home is sold.
Senator Pisciottano said the agreements can carry significant financial risks and often lack the transparency and safeguards consumers expect when making decisions involving their homes.
“This legislation will create rules and oversight for companies offering shared equity agreements, helping ensure homeowners receive clear information, fair terms, and stronger protections before signing away a portion of their home’s future value,” said Senator Pisciottano.
The legislation will serve as a Senate companion to House Bill 2120, bipartisan legislation introduced by State Representatives Arvind Venkat (D-Allegheny), Tim Twardzik (R-Schuylkill), and Lindsay Powell (D-Allegheny).
The proposal would create a new chapter under Title 7 (Banks and Banking) establishing licensing requirements and regulatory standards for shared equity providers and agreements operating in Pennsylvania.
“As shared equity agreements become more common, the need for comprehensive protections for homeowners has grown more urgent,” said Senator Saval. “I’m proud to work with Senator Pisciottano in ensuring that our Commonwealth’s regulations are updated to meet the needs of our residents.”
Senators Pisciottano and Saval noted that many shared equity contracts are complex and may include large balloon payments at the end of the agreement term, as well as restrictions on renovations, renting the property, or obtaining additional financing.