Better Living at Home

What Is a Residential Sale-Leaseback?

March 31, 2022

The sale-leaseback is becoming an increasingly popular option for homeowners looking to access their home's equity without moving. Find out how Truehold's Sale-Leaseback can help you live better at home.

If you’re a long time homeowner, chances are you’re already familiar with some of the options available for you to unlock your home equity: home equity loans and HELOCs, reverse mortgages, or even simply selling your home, to name a few. However, when you sell your house, you’ll have to find another one that meets your needs, which can be time consuming and unpredictable. Additionally, moving is one of the most stressful things a person can do, and it gets harder the older we get.

Fortunately, there’s a new option that many homeowners  are choosing to turn to: the residential sale leaseback. Unlike a home equity loan, HELOC, or reverse mortgage, a residential sale-leaseback allows homeowners to unlock 100% of the equity they have stored in their home without moving or carrying additional debt. Understanding a little more about exactly how the residential sale-leaseback works will allow you to decide if it’s a good option for you..

History of sale-leasebacks

The sale leaseback was first popularized in the arena of commercial real estate. It provided businesses with an attractive new option for eliminating debt on their property  while simultaneously liquidating the equity. 

Companies that chose this option were able to maintain their possession of a property, without becoming tied to the burdens of ownership. This process allowed business owners to free  up much needed cash to reinvest in the company.

For example, a small manufacturing firm owns a factory that makes motorcycle parts. The demand for these parts has grown, and the company would like to purchase additional manufacturing equipment. If they were to sell the building, they would free up the cash, but relocating would be prohibitively expensive. Securing a mortgage would be another option, but the proceeds of the loan wouldn’t yield enough money. 

So instead, they choose the sale-leaseback. They sell the building to a real estate firm that then leases it back to them for a negotiated term. With the cash they’ve freed up, they can purchase the equipment needed to  grow their business.

This arrangement, once found only in commercial real estate, is now available to residential homeowners with products such as Truehold’s Sale-Leaseback.

How do residential sale-leasebacks compare to reverse mortgages?

Other than selling a home, a reverse mortgage is usually the first thing people think of when they are looking for ways to free up accumulated equity. Truehold’s Sale-Leaseback offers a debt-free alternative.

A no debt solution

Reverse mortgages are a loan. When you take out a reverse mortgage,  your credit report  reflects the  debt. In the long run, this affects your ability to get approved for new credit cards, loans, or an increased credit limit

When you opt for  a sale-leaseback, you access 100% of your home’s equity  upfront with zero debt.. You can then use a portion of your unlocked equity to stay in your home as a renter, and use the remaining cash however you’d like. Check out our frequently asked questions to understand how Truehold determines your home equity and monthly rent.

Minimize upfront and recurring costs

In addition to debt, reverse mortgages come with several upfront costs. With a reverse mortgage, borrowers will typically be subject to origination fees, real estate closing costs, and an initial mortgage insurance premium. After the loan has been finalized, borrowers will be responsible for several recurring costs, including monthly interest payments, servicing fees, an annual mortgage insurance premium, and property charges such as homeowners insurance and property taxes.

In contrast, Truehold’s Sale-Leaseback has only one upfront cost – a small transaction fee. At the time of the sale, you will pay a 5% total transaction fee (less than a typical home sale) to cover legal fees, brokerage costs, and closing costs. After the initial transaction, there are no fees to work with us. Once the home sale is finalized, the only recurring fee will be your monthly rent payment. Truehold residents are not responsible for interest payments, home maintenance costs, homeowners insurance, or even property tax.

Unlock more cash

Typically, a reverse mortgage  only unlocks between 40-60% of your home’s value. Truehold’s Sale-Leaseback, on the other hand,  allows homeowners to access  100% of their  home’s value in cash.

No age requirements

Reverse mortgages are only available to adults  above the age of 62. , If you are a younger homeowner hoping to tap into your home’s equity, you can either wait until you are eligible for a reverse mortgage or consider another home equity unlock product. Options like home equity loans, HELOCs, and cash out refinancing have no age requirements but often require borrowers to provide proof of income. With Truehold, there are  no minimum age requirements, income requirements, or debt.

How do residential sale-leasebacks compare to other home equity unlock options?

Reverse mortgages are just one way older homeowners can access their home’s equity. Other home equity unlock products include cash out refinancing, home equity lines of credit (HELOCS), or home equity loans. Here’s how each of these options compare to Truehold’s Sale-Leaseback. 

Cash out refinancing

This may be a good option for homeowners who…

  • have a high credit score, usually 580 or more


  • are spending no more than 30% of their  gross monthly income on their mortgage payment. 

Eligible homeowners should be prepared to pay closing costs upfront and make monthly principal and interest payments on their cash out refinancing loan. Over time, they will be able to access up to 80% of their home’s value. 


This product allows you to obtain  a line of credit which is secured by the equity in your home. You’ll usually need…

  •  a minimum credit score of 600


  • a fairly low debt to income ratio,up to 43%.

Eligible homeowners will be able to access up to 85% of their home’s equity through a HELOC.

Interest rates can vary widely between 3% and 21%. Depending on the type of HELOC you choose, you may need to make minimum payments of interest or interest plus principle.

Home Equity Loan

The home equity loan requires… 

  • a minimum credit score of 620 


  • a low debt to income ratio, up to 43%  

 As with a HELOC, eligible homeowners will be able to access up to 85% of their home’s equity through a home equity loan.

Some home equity loans impose a prepayment penalty. This means that if your financial situation changes and you’d like to pay off the loan quickly, you’ll have to pay an extra fee.

Truehold’s Sale-Leaseback

Our Sale-Leaseback is not a debt, which means homeowners who choose this option will be able to avoid fees and penalties typical of other home equity unlock products., Additionally, all Truehold residents  access 100% of their  home’s equity upfront. The only recurring obligation is a monthly rent payment, determined based on rental values of other homes in your neighborhood..

Is a residential sale-leaseback right for you?

The best way to find out if Truehold is a good fit for you is to reach out to us! Fill out the form below to request a complimentary copy of our info kit. Alternatively, you may get in touch with a Truehold Advisor directly at (314) 353-9757.

Get a free info kit to learn more about Truehold's Sale-Leaseback.

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Further Reading

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