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Shared Equity, Powerful Results:
Helping One Generation of Homeowners After Another
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 materials for communities to learn more about shared equity strategies:
- Getting Started: Online Shared Equity Tutorial
Take just eight minutes to learn how shared equity benefits homebuyers and the communities in which they live. Please note, this link will take you to an external website.
- 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.
- 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.
- 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.
- Applying Shared Equity in a Weak Housing Market
While designed primarily to address the housing challenges posed by strong housing markets, shared equity homeownership also has application in weak housing markets. - Balancing Durable Affordability and Wealth Creation: Responding to Concerns About Shared Equity Homeownership (PDF)
This report, which was supported by the Annie E. Casey Foundation, explores community concerns over the potential limitation of wealth creation in shared equity homeownership programs and how to best balance permanent affordability and asset building in these programs. - What’s in a Name? Clarifying the Different Forms and Policy Objectives of “Shared Equity” and “Shared Appreciation” Homeownership Program (PDF)
This report, which was supported by Fannie Mae, seeks to clarify the overall characteristics of shared equity / shared appreciation homeownership programs, identify the distinguishing characteristics of the multiple programs, and show how the different programs fulfill somewhat distinct housing policy objectives. - Shared Equity Homeownership State Policy Review (PDF)
This report, funded by the Ford Foundation and NCB Capital Impact, presents a review of programs and policies across 22 states that either support or hinder the development of shared equity homeownership. These programs and policies provide an illustrative guide for ways to improve state regulations and practices to better promote long-term affordable homeownership and the preservation of homeownership subsidies.
Report Appendix (Excel)
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 email chp-feedback@nhc.org.
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.