Affordable housing is a growing problem in the United States, with 580,000+ people experiencing homelessness on a given night and a shortage of 6.8 million affordable homes. In addition, millions of families struggle to stay in their homes due to illness, job loss, or the impact of rising interest rates on variable-rate mortgages.
American Homeowner Preservation allows everyday investors to support families to keep their homes through AHP Title Holdings, starting with as little as $100.
What is the AHP Title Fund?
AHP Title Holdings enables investors to earn up to a 9% return while helping families at risk of foreclosure. By raising up to $75 million in a Regulation A+ offering to everyday investors, the fund focuses on buying defaulted loans at a discount and then working to help families keep their homes with more affordable payment terms.
After acquiring a defaulted loan, the fund modifies the mortgage to make payments more affordable. Once timely payments are made for six to 12 months, they resell the loan at close to 100% of the balance owed to generate a positive return. The fund may also offer a deed-in-lieu-of-foreclosure or a short sale to help homeowners.
The Regulation A+ offering is for Series A preferred stock at a fixed price of $10.00 per share. The company aims to return all the money invested by each investor within five years, then deliver monthly distributions equivalent to a 9% compounded yearly return. After reaching that threshold, the company will cancel the stock.
Should You Invest with AHP?
The AHP Title Fund provides non-accredited investors with a unique way to help struggling homeowners stay in their homes. At the same time, investors can earn an attractive 9% compound annual return paid monthly after a ramp-up period. But, of course, there are some risks and other factors to remember.
Rising mortgage interest rates could make it more difficult for homeowners to refinance delinquent loans at an acceptable monthly payment. At the same time, rising rates could hurt real estate prices, increase opportunity costs for investors, and adversely impact the ability to sell a house at an attractive price.
Investors in the offering are also purchasing Series A preferred stock rather than debt securities. As a result, the company's other creditors will be repaid in the event of bankruptcy before equity holders receive any proceeds. These dynamics suggest that investors could lose their entire investment if the company is unsuccessful.
The Bottom Line
American Homeowner Preservation helps struggling homeowners stay in their homes. While the company's business model combines an impact objective with an attractive financial return, investors should be aware of the risks in today's rising interest rate environment and only invest money they can afford to lose.