A company in New Jersey called Irene started earlier this year with the goal of enabling seniors to stay in their homes for the rest of their lives by giving them access to their home equity. The idea of freeing up equity for a cash-poor senior homeowner to live off of may be a new idea in the US, but the practice has been around for a long time in Europe. While in countries like Italy & France the transaction is done on a peer to peer basis, Irene is seeking to institutionalize this strategy in the US.
First, Irene employees meet with the senior-aged homeowner who are considering selling their home to the company. The homeowner is then provided with an offer, a home inspection and if they agree, the contract is signed and a closing date is chosen. At closing, Irene pays the homeowner cash in the amount of the original down payment and the company takes the title to the home. Irene also takes over mortgage payments, property taxes, maintenance costs and home insurance costs. All the while, the seller agrees to continue to live in the home until they pass away. Depending on the outstanding mortgage balance, the senior either gets to live in it rent-free or for a small rental cost (paid to Irene). Upon the homeowner passing away, Irene will inherit the home.
With rising maintenance costs, insurance and taxes, it is hard for seniors who have a fixed income to continue to afford the monthly cost of homeownership. This new company is poised to provide unique solutions to allow their clients a safe and secure retirement in their own home.
Irene is currently raising capital from real estate investment companies. They chose to start in New Jersey due to the high property tax rates. Next, Irene will be rolling out into Florida, California and Washington state.