New York City homeowners will soon have the opportunity to access cash locked into the value of their homes by using a new financial product that operates similar to an options contract. A California company, Real Estate Equity Exchange, Inc., now operating in seven states, will buy shares of a residential property in exchange for a large, up-front cash payment. Homeowners can access the cash without debt and interest payments.

“If you have a house and you want to use it as an ATM, you can take out a home equity loan or you could use this service,” a housing derivatives broker for Tradition Financial Services, Fritz Siebel, said.

The company, Rex, makes a deal with a homeowner to buy a percentage of his or her property based on its current value. The owner immediately gets cash for part of this purchase. From the homeowner’s point of view the entire appeal of the contract is that the money never has to be repaid with interest.

Rex reaps its benefits later. When the homeowner wants to sell the house, he or she must first buy back the shares from Rex. Since time has passed — up to 50 years can go by before the contract expires — the price of the house will have changed. If the price went up, Rex will get more money than it paid for the shares because they will have increased in value.

The entire process essentially grants Rex, at the time of a future home sale, the right to buy part of a house for a fixed amount and then sell it right back for a potentially higher amount. The cash the homeowner gets is actually part of this future purchase, paid in advance.

Someone who owns a home worth $1 million could agree to sell 35% of the home to Rex for the discounted price of $335,000. Rex would immediately give the homeowner $100,000. Later, if the homeowner were ready to sell the house at $1.2 million, he would first have to buy back the 35% of the house, at its new value from Rex. In turn, Rex would hand over the remaining $235,000 from the first exchange. Rex would make $18,000 on the deal, by selling the shares at their new value, $420,000.

It’s so complicated that any homeowner who wants a contract has to pass a quiz before Rex will seal the deal.

“It sort of shows the levels of sophistication of the financial products that are entering the real estate market,” the president of the New York-based consulting group Miller Samuel, Jonathan Miller, said.

An online brochure touts Rex as a good source of funds for home renovations or education costs, but advisors see it as a product geared more towards retirees.

“Our clients wouldn’t necessarily need to monetize any of their residential real estate, but their parents could,” a managing director at Lenox Advisors, a New York-based wealth management firm, Kirk Michie, said. He explained that older homeowners no longer earning income from a job could use the money to buy a fixed annuity stream and generate more spending money.

But Rex’s contracts aren’t just for homeowners. On the other side of the equation is the insurance giant, AIG, one Rex’s biggest investors. An investment company established by AIG sells Rex’s contracts to investors the way other companies sell mortgage debt. Buying these contracts is the newest way to tap into a residential real estate market whose total value is close to $23 million, according to Mr. Seibel.