Great Q! As of now, the homeowner has to refinance on the smaller lot. We have a partner that will do it at the time of application, and underwrite it in consideration of the future income.It hasn't been a problem to date, though it may hold up some projects.

In theory banks could approve the transfer—certainly they could split the lot, but the current lien would be spread between the two lots, and we couldn't finance the property today.

A crazy insight: Many of the customers we work with don't have mortgages.

They intrinsically don't trust debt, because of either low income, job insecurity, and/or their long tenure of homeownership (often intergenerational). They do like the ideal of selling their yard for money, and don't have the risk appetite/ability to go it alone!

We're working on a solution that will allow the existing lien-holders to stay on title until sale--making a refinance less burdensome for the current homeowner.

Down the road, we'd like to provide the owner to keep some ownership interest in the property with homestead, if they'd prefer long term income. In this arrangement, we likely wouldn't

For home value: It's about 5-12% decrease depending on the setup--in extreme cases as bad as 15%. We haven't had a pre-assessment come in lower than 15% (the homeowner still going to make a lot——it's a large property). Most are around 7-8%. Usually there is 50%+ return, so that previously illiquid/non-existing capital has a much higher value, but there is real depreciation.

Lower value homes depreciate less, higher value more--but are offset by larger returns!

It will likely re-appreciate in a few years, and so the loss is temporary/the other capital could be deployed to quickly outpace any depreciation.