Exploring Shared Equity Homeownership

"Shared equity represents a unique approach to affordable homeownership. Under this approach, a state or local government provides funding to help a family purchase a home. In return for this investment, the government entity shares in the benefits of any home price appreciation that may occur. The public's share of the home's appreciation may be used in two ways; it can either be returned to the government in the form of a cash payment that can be used to help another family, or it can stay with the home, reducing the cost of that home for the next family.

"By sharing the gains in home price appreciation with the public investor, shared equity results in substantial benefits now and for years to come. Homebuyers benefit from a substantially lower home price and the opportunity for significant home equity gains. Local communities benefit by retaining vital workers who otherwise couldn't afford to live in the communities they serve. And, by ensuring that the public's investment keeps pace with the housing market, shared equity strategies allow governments to help generations of families achieve homeownership with a single initial investment.

Working with Rick Jacobus of Burlington Associates and with financial support from the Annie E. Casey Foundation, the Center for Housing Policy has developed four ways for communities to learn more about shared equity strategies."

Thanks to Jon Cecil, AICP