State Policy:

The initiative is compiling a detailed inventory of state programs and policies which either support or hinder the development of shared equity homeownership units sponsored by local governments or nonprofit agencies.  In some cases state programs or policies inadvertantly stand in the way of local programs making it more difficult to effectively preserve affordable homeownership.  In other cases state governments have adopted policies intended to encourage and support local shared equity homeownership programs. 

This document provides examples of the types of policies and programs which we are seeking. If you are aware of programs or policies that should be included in our inventory, please contact us.

Federal Policy:

The initiative has identified three federal housing policy priorities:

1. Shared Equity Pilot Program:

Initiative partners have developed a proposal for a $125 million pilot program which would allow the federal government to learn more about how best to promote and support the growth of local shared equity homeownership programs that produce affordable ownership units at a higher scale.  The program would produce roughly 5,000 permanently affordable homeownership units and build lasting capacity to create and steward these homes in 8 to 10 communities.

The proposal has been discussed with staff at HUD and the Office of Management and Budget and was included as a potential research project in the draft HUD budget.

Learn more about this proposal and add your name to the list of supporters.

2. Updating FHA Underwriting Guidelines:

One of the key barriers to the expansion of shared equity homeownership programs has been the difficulty that they have had obtaining approval for FHA insured loans for their homebuyers.  Where Fannie Mae has developed clear and universal guidelines for shared equity homeownership programs, FHA has been unable to approve many programs and required others to make modifications to their basic rules which undermine the important public purpose of these programs.  With the recent credit contraction, FHA has become an increasingly important element of the home mortgage landscape and it has become imperative that shared equity homeownership programs have access to these loans.  The shared equity homeownership initiative, working with the National CLT Network, has developed a series of proposals to update FHA’s 1992 guidelines limiting local affordability controls.

Learn more about this proposal and add your name to the list of supporters.

3. Encouraging wiser investment of HOME funds

HOME funds represent one of the most promising sources of existing federal funding for community land trusts, resale-restricted homes, and other forms of shared equity homeownership.  Yet, many HOME programs are reluctant to require permanent affordability, often following the minimum HOME program guidelines for affordability covenants, which range from 5 to 15 years depending on the amount of funding involved.  There are a number of steps that HUD could take to encourage the use of HOME funds for shared equity homeownership, including:

• Issuing a HUD notice to all participating jurisdictions explaining what shared equity homeownership is, encouraging jurisdictions to invest in shared equity homeownership, reminding jurisdictions that the minimum affordability periods are just that — minimums, and addressing other questions that may come up in using HOME funds for this purpose.
• Creating incentives for jurisdictions to invest in shared equity homeownership.  One approach would be to allow jurisdictions to claim a higher administrative fee if they invest in permanently affordable homeownership or if they recapture funds to help future homebuyers.  These administrative fees would offset the higher administrative costs involved in long-term stewardship.