Shared Equity Model: The Basics
What is Shared Equity?
Shared equity ultimately enables long-term affordable homeownership and wealth-building opportunities by lowering the homeownership hurdle for individuals and families that may otherwise be priced-out of the housing market.
Generally, property value is a combination of land (the ground) and improvements (the home and anything else added to the property lot). The Trust purchases all elements of a property and sells only the improvements to a qualified purchaser.
As the value of the entire property increases, the homeowner is able to build wealth through price appreciation and mortgage payoff.
Benefits of Shared Equity
Sustainable Homeownership
Shared equity significantly improves the chances of achieving and maintaining homeownership for individuals and families, particularly for those with lower incomes and from diverse racial backgrounds. By utilizing a model that leverages shared equity and public investment, the Trust makes homeownership more attainable for those who may otherwise struggle to enter the housing market.
Wealth Building
By reducing the initial purchase price through public investment, individuals and families have a better chance of building equity over time, thus narrowing the wealth gap and increasing financial stability for historically marginalized groups.
Advancing Public Investment
Efficient and strategic allocation of public investment enables the Trust to create more affordable housing opportunities and help a greater number of community members find stable and sustainable homes.
Stronger Neighborhoods
The positive effects of the Trust extend beyond individual households. As homeownership becomes more attainable, it strengthens the fabric of communities, leading to safer, higher-quality neighborhoods. Homeowners often have vested interest in their community’s well-being, fostering a sense of price and responsibility that promotes community bonds and neighborhood improvements.
Advancing Education and Workforce Outcomes
The correlation between stable housing, education, and job attainment is well-established. Stable home environments positively impact children’s educational performance and provide adults with a strong foundation for career advancement and economic mobility. As the Trust focuses on affordable homeownership, individuals and families gain stability and security, which can translate into improved educational outcomes and better employment prospects.