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:

1. Getting Started: Online Shared Equity Tutorial
   Take just eight minutes to learn how shared equity benefits homebuyers and the communities in which they live.
   
   
2. Taking the Next Step: Understanding Your Options
   Preservation of Affordable Homeownership: A Continuum of Strategies (PDF) provides an overview of the homeownership strategies available to communities and explains the pros and cons of different approaches.
   
   
3. Finding the Right Formula: How do Different Shared Equity Strategies Compare?
   Shared Equity, Transformative Wealth (PDF) takes an in-depth look at three different shared equity approaches and shows that the best shared equity programs can build significant wealth for one family after another without any long term loss of affordability.
   
   
4. Running the Numbers: Customize the Strategies for Your Community (Excel)
   Using the Center’s interactive spreadsheet, provide your local data, or use set defaults, to see how different shared equity strategies will work based on area home prices and other factors.
   

Readers are invited to provide feedback on these materials by sending an e-mail to chp-feedback@nhc.org.

Shared equity is just one of many ways that state and local governments can make homes affordable for working families. A guide to proven strategies for providing affordable rental homes and homeownership is available at www.HousingPolicy.org. To receive periodic updates on the Center’s work on state and local housing policy, please sign up at www.nhc.org/tools/notify.php.

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Acknowlegements

The Center gratefully acknowledges the support of the Annie E. Casey Foundation for these materials. The findings and conclusions they present, however, are those of the authors, and do not necessarily reflect the opinions of the Foundation. The Center greatly appreciates the work of the lead author, Rick Jacobus, as well as the contributions of Maya Brennan, a research associate at the Center, who helped to review and produce the final products.