An Act relative to home investments

194th Legislature (2025-2026) Introduced by Dan Cahill

Massachusetts would license and regulate shared equity home investments to broaden ownership options while safeguarding homeowners and the public from risk.

Overview and purpose

HD 2692 proposes creating a formal regulatory framework for “shared equity investments” in residential property in Massachusetts. Referred to in the text as Chapter 255G (Shared Equity Investments), the bill would authorize licensing and supervision of entities that provide non-recourse shared equity investments to homeowners, with the goal of expanding homeownership options while protecting homeowners and the public from undue risk or misrepresentation.

Key definitions and concepts

The bill provides a detailed glossary to standardize terms used in shared equity arrangements. Notable definitions include:
- Agreed home value: property value at origination agreed by homeowner and investor; excludes discounts or risk adjustments.
- Shared equity investment: a non-recourse transaction in which an investor provides funds to a homeowner in exchange for an equity interest or a future payment, not classified as a mortgage loan.
- Settlement/payment terms: “settlement” and “settlement payment” describe how a homeowner ends the agreement and what is paid to settle, excluding certain reimbursements or fees specified in the contract.
- Beginning home equity: homeowner’s unencumbered equity after the investment, expressed as a percentage.
- Annualized cost: the yearly cost of the investment, calculated via a specified formula.
- Shared equity investor and holder: defined roles for entities that provide or passively hold SEIs.
- Licensed and exempt entities: defines who must be licensed and who may be exempt (see below).

Licensing and regulatory framework

License requirement: No person may act as a shared equity investor for residential property without first obtaining a license from the Massachusetts Commissioner of Banks.

Exemptions (illustrative, based on the text available):

Employees or affiliates acting under the direction of a licensed SEI may be exempt from licensing.
An investor making 12 or fewer SEIs within any 12-month period may be exempt, with specifics for coordinated ownership structures.
Certain financial institutions (e.g., banks, federally chartered entities) are listed as exemption candidates.

Regulator: The Commissioner of Banks would oversee licensing, enforcement, and compliance, potentially with a multi-state licensing framework to share regulatory information.

Who is affected

Homeowners entering into shared equity investments.

Shared equity investors and their employees or affiliated entities.

Licensed professionals and institutions under Massachusetts state supervision.

The Commissioner of Banks and related regulatory infrastructure, including potential multi-state regulatory coordination.

Procedural and timeline aspects

The bill would add a new Chapter 255G to the General Laws, establishing licensing, definitions, and the framework for SEIs.

It includes timelines tied to investment origination, term days, and settlement, with a non-recourse structure designed to terminate via specified settlement terms.

The exact effective date and detailed exemption criteria are not fully provided in the excerpt.

Additional notes

The text provided is an excerpt with a truncated section on exemptions; the full bill would detail licensing processes, ongoing supervision, consumer protections, disclosure requirements, and enforcement mechanisms.

As introduced, this is a proposed bill in the 2025-2026 Massachusetts General Court. It would become law only if enacted by the Legislature and signed by the Governor.

Bill