What’s the Point?

14 September 2016 By Robert Cyran Follow @rob_cyran

Startup Point hopes to supplant mortgage debt with potentially pricey mezzanine financing. It’s easy to see why the company and backers like Andreessen Horowitz are interested in a kind of “heads I win, tails you lose” idea. It’s harder to see why sensible homeowners should be.

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Venture-capital firm Andreessen Horowitz on Sept. 13 said it was the leading investor in a series A investment in Point, a startup which buys equity in homes from owners. The owner must pay a 3 percent processing fee and appraisal costs and receives money typically worth 5 percent to 10 percent of his or her "risk adjusted property value." Point is paid back when the house is sold or at any point by the owner and takes a percentage of any appreciation in the value of the home.

Homeowners must retain equity equal to at least 20 percent of the home's value. If the house depreciates, Point is paid back after the mortgage holder, but before the owner.

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