Originating HEIs

Originating HEIs

Manifest acquires HEIs with a large built in discount on the price of the underlying property. Manifest works with an origination partner to originate each HEI. Our partner sets terms for each HEI with the homeowner based on the current value of the home and the prevailing market terms for HEIs. Currently these terms result in a discount in the value of the asset of approximately 50%.

Manifest’s origination partner handles all homeowner-facing elements of the HEI transaction. Manifest directs the origination partner to originate HEIs within a set investment ‘buy box’ based on Manifest’s expertise with HEIs. The origination partner also performs industry standard mortgage underwriting and closing processes to make sure all assets are valid and meet investment requirements.

Initial Assessment and Qualification

The origination of HEIs follows a structured assessment process to identify qualified homeowners who meet established financial and property-related criteria. This ensures alignment with our risk management and return expectations. This stage is critical in maintaining portfolio quality and risk-adjusted investment exposure.

• Homeowner Equity Position: Accounting for all mortgages on the property, including the HEI, the homeowner must have a minimum of 25% equity in the property (to ensure the homeowner has meaningful economic interest in the home).

• Property Type: Single-family homes

• Market Selection: U.S. MSAs (cities and densely populated areas)

• Financial and Credit Evaluation: Comprehensive review of homeowner creditworthiness, debt obligations, and financial stability according to industry-standard underwriting practices.

Property Valuation & Due Diligence

Our origination partner uses several valuation methods to value the home. All valuations are from third parties to avoid conflicts of interest on individual properties. The process adheres to institutional standards and includes:

• Hybrid Appraisal: Properties are valued by automated valuation models and live professional appraisers if there are any extenuating circumstances.

• Industry Standard Underwriting: Standard homeowner diligence, including credit reports, title reports, and other verifications are performed to understand homeowner and property situation before HEI origination.

HEI Pricing & Investment Structuring

Based on diligence, the homeowner is made an offer by our origination partner. The offer follows the standard HEI deal structure.

• Equity Multiple: 2.0x or greater

• Effective Rate Cap: 19.99% per month, annualized

• Term: 10 years or matched to the primary mortgage, whichever is longer

Legal Documentation & Execution

Our origination partner makes the offer to the homeowner and a closing date is set. All agreements are signed and appropriate recordings on title are made to secure the HEI.

Funding & Post-Origination Asset Management

Upon execution, capital deployment and ongoing asset monitoring commence. Proactive asset management and valuation updates help ensure that HEIs are performing and investors are protected.

• Investment Disbursement: Homeowner receives funding.

• Ongoing Valuation & Portfolio Oversight: Regular monitoring of property value, homeowner financial health, and exit readiness

• HEI Settlement: The HEI matures when the property is sold, refinanced, or the duration expires. The homeowner also has a repurchase right so they can terminate the HEI whenever they want by requesting a payoff statement. Typically, the terminating HEI payment is captured automatically as part of a closing process in a sale or refinance.