As we have addressed on this blog, home equity investment (HEI) products, such as shared appreciation mortgages and home equity agreements, have come under recent scrutiny from regulators and industry groups. The crux of the debate is whether these products should fall under existing regulatory regimes for mortgage loans or require entirely new regulations. This blog provides a high-level summary of recent federal and state laws or proposed laws intended to regulate HEI products.

Recent Federal Proposal

Senate Bill 4803, also known as the Home Equity Lending Integrity Act, was introduced to the United States Senate on June 17, 2026. The purpose of the proposed act is to amend the Truth in Lending Act (TILA) to encompass HEI products. The proposed act would amend the definition of a residential mortgage loan under TILA to include “a home equity investment loan.” A home equity investment loan would be defined as:

a transaction that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling or on residential real property, including any option, future, or other derivative between a person and a consumer where the consumer receives money (or any other item of value) in exchange for —

1. an interest (or future interest) in a dwelling or residential real property; and
2. a contingent or certain obligation to pay an amount based, in whole or in part, on the value of the dwelling or residential real property.

The proposed act also tasks the Consumer Financial Protection Bureau (CFPB) with creating regulations for such home equity investment loans.

The proposed act is a long way off from possibly becoming law, as it has only recently been referred to the Senate Committee on Banking, Housing, and Urban Affairs. However, the proposed act is notable because it shows some intent to subject HEI products to existing federal regulations for traditional residential mortgage loans.

State Law Updates

Like the proposed act at the federal level, some states have addressed HEI products by extending existing mortgage loan frameworks, while others have created new regulatory regimes specific to these products.

Extending Existing Mortgage Frameworks

Connecticut, Maine, North Carolina, and Pennsylvania have each taken the approach of treating HEI products as a subset of existing mortgage or consumer credit law.

Connecticut’s recently enacted legislation took a broad approach, amending the state’s existing consumer credit and lending laws to add required disclosures for shared appreciation agreements alongside updates to other consumer lending categories. Connecticut General Statutes Annotated § 36a-498i has been in effect since October 1, 2025, and requires disclosures within three business days of application. The disclosures cover four broad categories: (1) consumer warnings, (2) deal terms and structure, (3) valuation methodology, and (4) repayment scenarios/cost calculations, including examples at the five, 10, 15, and 30-year settlement points run across five value scenarios.

Maine enacted emergency legislation effective April 13, 2026, bringing Shared Appreciation Mortgage loans (SAMs) within Maine’s Consumer Credit Code as a type of “consumer loan.” As we discussed in a recent post, LD 1901 both extends existing consumer loan provisions to SAMs and creates new product-specific requirements, including mandatory pre-loan counseling, detailed disclosures, prohibitions on prepayment penalties and mandatory arbitration, and a supervised lender licensing requirement. The law also retroactively codifies a Maine Bureau of Consumer Credit Protection ruling that took effect October 29, 2025, which determined that SAMs are consumer credit transactions subject to Maine’s mortgage loan provisions and that SAM providers are supervised lenders, rendering void and unenforceable any SAM secured by Maine residential real estate that was originated on or after that date without complying with that ruling. However, according to the Coalition for Home Equity Partnership (CHEP), the bill is aimed at preventing the shared equity industry from offering products in Maine, as no providers have issued SAMs in Maine.

North Carolina’s HB 1211, the Home Equity Investment Loan Act, was filed in the House on April30, 2026,and seeks to regulate HEI products as residential mortgage loans. The bill requires companies to be licensed under North Carolina’s existing mortgage licensing laws and provide detailed disclosures “within 10 business days after application, and in any event not less than 20 business days before closing.” It also mandates both independent legal counsel and housing counseling at the lender’s expense, prohibits deficiency judgments, and requires lenders to offer a refinance option if a borrower cannot pay off the HEI product at the end of its term. HB 1211 has not yet been enacted.

Pennsylvania also has moved to extend mortgage-style regulation to HEI products. HB 2120 would create licensing, oversight, and compliance requirements for shared-equity providers, administered by the Department of Banking and Securities. The bill passed the House 190-11 on June 2, 2026, and is now before the Senate Banking and Insurance Committee, with consumer advocacy groups such as the National Consumer Law Center voicing support.

Creating a New Regulatory Regime

Illinois has taken a different approach. On June 1, 2026, the Illinois Department of Financial and Professional Regulation adopted comprehensive new regulations governing “shared appreciation agreements” under the Residential Mortgage License Act of 1987. While the regulations use existing mortgage licensing as their foundation, they create a detailed, product-specific regulatory framework with requirements that have no counterpart in standard mortgage law. These include mandatory counseling, property valuation rules, a minimum five-year agreement term, detailed cost scenario tables, and, most significantly, a 36% APR repayment cap that renders any noncompliant contract null and void. The APR cap arguably reflects a legislative judgment that existing consumer protections are insufficient for these products.

Looking Ahead

The difference between these two approaches matters for industry participants operating across state lines. Products structured to comply with one state’s mortgage framework may not satisfy another state’s purpose-built regime, and the scope of applicable requirements, from licensing to disclosure to rate caps, can differ significantly depending on which model a state adopts.

The regulatory landscape for HEI products remains in flux at both the federal and state level. At the federal level, the proposed act would bring HEI products under TILA, but it just was referred to committee and remains a long way from enactment. Meanwhile, states continue to act at their own pace, with Connecticut, Illinois, and Maine already moving forward with statutes and/or regulations and others, such as North Carolina and Pennsylvania, still advancing their legislative agendas. We expect requirements to keep varying from state to state as more jurisdictions act, with no uniform standard likely anytime soon. We will continue to monitor federal and state developments in this area and provide updates as they unfold.