When House Prices Fall

What happens if home values decline?

The Equity Multiple provides a strong buffer against market declines. Since the investor's effective ownership percentage is doubled relative to their investment, the value of the house would need to fall more than 50%, and the homeowner would need to sell their house at that lower value, before the investor would experience any loss on principal.

For example, in a typical HEI, an investor contributes $100,000 toward a $1,000,000 home (10% of value) but receives 20% of the economic rights. This means the home value would need to drop below $500,000 or 50% before the HEI would be underwater. This provides meaningful downside protection compared to traditional equity investments, though severe market corrections could still result in losses.

What happens during extreme market volatility?

During extreme market volatility, the protocol's robust design provides stability. The underlying assets are held by bankruptcy remote custodians and our claims are secured by liens on title. Because the assets are real, in an extremely volatile market, investors should seek the relative safety $USH provides.