Proposal: Taking Shared Equity to Scale

A Federal Demonstration of a New Approach to Sustainable Homeownership

The proposal is to invest $125 million in a demonstration project benefiting approximately 5,000 households. This project would test and document the viability of shared equity homeownership – a promising new approach to creating and preserving affordable homeownership and asset-building opportunities for millions of American families. Shared Equity homeownership represents a safer and more sustainable approach to affordable homeownership that, if adopted widely, could provide families with meaningful alternatives to the risky subprime financing that contributed to the foreclosure crisis and resulting economic meltdown.

A demonstration program focused on bringing shared equity homeownership programs to significant scale in 8-10 housing markets around the country could contribute to the nation’s immediate challenges by:

  • Helping homeowners avoid foreclosure by giving them the option of converting their home from traditional to shared equity homeownership.
  • Stabilizing communities affected by foreclosures by facilitating the marketing and sale of foreclosed homes using shared equity homeownership.
  • Funding the construction and/or rehabilitation of affordable shared equity homes near public transit and job centers. This would create construction jobs, help to reduce energy use and carbon emissions associated with long car trips, and improve job access and stability for low- and moderate-income families.

In addition to addressing the immediate objectives of keeping families in their homes, stabilizing communities and stimulating the economy, this demonstration would also build the capacity of key local partners to work together to advance the federal goal of creating a system to support sustainable homeownership. Lessons learned from this Shared Equity Homeownership initiative would help inform the more than $1 billion annual spending on homeownership through federal block grant programs, as well as hundreds of millions of state and local funds.

In all, this proposal would help create sustainable homeownership opportunities for an estimated 5,000 families, as well as thousands of future homebuyers who move into the homes once the original occupants elect to move on.

Download the full proposal