Taking Shared Equity Homeownership to Scale

NCB Capital Impact is facilitating a broad effort among national and local organizations to design and implement a five-part strategy for taking shared equity homeownership to scale. The shared equity homeownership initiative brings together national, regional, and local partners to undertake a target set of key strategies outlined below.

A national system of shared equity homeownership will stabilize housing markets and strengthen neighborhoods while providing both affordable housing costs and predictable wealth creation to millions of American families. By filling the widening gap between renting and traditional homeownership with a new, intermediate form of housing tenure, we can return to a housing policy that offers both greater security and an opportunity to build wealth for lower income households. We can grow this new housing sector to a scale where it offers housing and wealth building opportunities to the majority of all families currently on the cusp between renting and owning. And we can do that without any increase in funding for affordable homeownership. By redirecting only a portion of what we currently spend to subsidize homeownership into longer lasting investments, we can build a permanent portfolio of affordable homeownership units large enough to permanently bridge the gap between renting and traditional ownership.

Vision: Through a coordinated set of collaborative interventions, the initiative seeks to make Shared Equity Homeownership an established and accepted segment of the housing market nationwide within 10 years.

I. Financing Systems and Products

Goal: Move beyond custom approval of idiosyncratic local SEH programs to standardized national loan products that serve the range of local needs.

A. Streamline Access to First Mortgage Products for SEH Buyers

Establish NCB Capital Impact as a direct conduit to both Fannie Mae and FHA specializing in Shared Equity Homeownership mortgages. Invest in building systems and procedures that make sense for SEH. Reach out to local governments with SEH programs.

B. Create guaranteed acquisition fund for CLTs and other nonprofit developers of shared equity homeownership.

Create pools of acquisition and pre-development financing at both the national and local level. Approach State Housing Agencies and foundations as potential guarantors.

C. Explore potential use of New Market Tax Credits as a source of subsidy to leverage local funds.

Develop a replicable model for leveraging NMTC to induce larger jurisdictions or State Housing Agencies to build infrastructure for SEH.

II. Local Capacity Building

Goal: To support the growth of a robust sector of public and nonprofit agencies with the skills, systems, policies and procedures needed to successfully manage rapidly growing portfolios of Shared Equity Homeownership units.

B. Shared Equity Homeownership Academy

Partner with the NeighborWorks Training Institute and the CLT Academy to produce and deliver a series of workshops designed to strengthen local SEH capacity.

C. Online Peer Exchange

Work with the Center for Housing Policy to host an online discussion forum for SEH practitioners as part of HousingPolicy.org.

D. Program Toolkit

Develop a suite of tools to help local practitioners to build more robust and scalable business models.

E. Operating Manual

Work with the CLT network to update the CLT legal manual into a more general purpose operating manual and adapt portions of the document for non-CLT shared equity homeownership programs.

F. Neighborhood Stabilization Program Assistance

Create a set of resources designed to encourage local agencies developing new programs to purchase vacant foreclosed properties to consider Shared Equity solutions.

III. Policy Maker and Industry Awareness

Goal: To dramatically increase awareness and understanding of SEH among policy makers, and key people within the real estate and affordable housing industries.

A. Network outreach

Build active partnerships with key national networks to greatly expand awareness and understanding of SEH among 4 target groups: 1. Local and state elected officials, 2. Local and state housing agency staff, 3. nonprofit producers of affordable housing, and 4. for profit producers of affordable housing.

IV. Quality Improvement and Research

Goal: To objectively measure and document the impact of SEH programs and evaluate whether the programs are meeting public policy goals.

A. Formal research to evaluate and document performance of SEH programs

Conduct a multi-site post occupancy evaluation of benefits to previous owners of shared equity homes.

B. Performance Benchmarking Tool

Develop a web based tool for capturing real time performance data from a large number of SEH programs to facilitate business model benchmarking (comparison between programs) and to support advocacy efforts.

VII. Public Policy

Goal: To lay the groundwork for expanded investment in affordable homeownership by dramatically realigning existing affordable homeownership programs at the Federal, state and local levels to strike a more sustainable balance between asset building and preservation of affordability.

A. Federal

Organize a coalition to work together on a common agenda for changes to policies and procedures in existing programs such as FHA, HOME and others. Advocate for a $150 million Federal pilot which would provide matching funds to local or state level SEH programs.

B. State

Compile snapshots of existing state programs and policies and track changes over time. Publish report on state efforts to support preservation of homeownership subsidies.