Paying it Forward: Shared Equity Home Purchase Programs

As you consider paying it forward in the season of giving, FannieMae has created a home buying program that does just that.  It is called the Shared Equity Program and it allows borrowers to purchase homes at below market prices.  In exchange, those borrowers must agree to sell the property ONLY to other income-qualified (buyer’s income is capped) buyers and/or must share the home’s appreciation with the organization that subsidized the purchase.

How Does it work?

There are a variety of shared equity programs but the Federal Housing Finance Agency (FHFA) divides them into two categories:

  1. Programs administered by Community Land Trusts, other nonprofit organizations, State or local governments or instrumentalities that restrict resale.
  2. Loan programs administered by  Community Land Trusts, other nonprofit organizations, State or local governments or instrumentalities that require the appreciation be shared.  These administrators may partner with a for-profit institution to invest in, originate, sell, or service the shared appreciation loans.

Wait, what? 

  • When you buy under this program, you get a home for less than current market value; but you must sell to someone else buying through this program.  Their household income must also be low to moderate income. 


  • You buy the home for less than current market value. 
    • You can buy a home on an affordable leasehold (lease the land the residence is built on); 
    • You can buy the home with a community second mortgage that does not always require repayment unless or until you sell the home or pay off the first mortgage; 
    • Other party makes sale possible at below market pricing so you can afford the home, but you shall not sell it without repaying the proceeds upon resale if sold less than 30 years after purchase.

This program is about making homes affordable to more low- to moderate-income home buyers.  You can give your family a new home out of it, but you don’t get to make a killing off of the sale of that home a couple of years from now. is not a lender, but can help you find the mortgage professional who offers these programs. Visit today at