What is shared equity homeownership?
Shared equity homeownership is a way to lower the cost of buying a home. Champlain Housing Trust’s shared equity program enables people to buy a home without a down payment and with a reduced mortgage.
Why a shared equity program?
The two biggest obstacles to buying a home are saving for a down payment and the high prices of homes. Our shared equity program addresses both problems.
Advantages to shared equity homeownership:
- Helps low to moderate income earners become homeowners
- Lower home prices for buyers
- Owner builds personal wealth from equity in their home
- Strengthens communities by protecting long term affordability and property values
How does the shared equity program work?
In order to qualify, you must fall into a certain income range; cannot own another home or have significant assets outside of retirement savings.
State and federal funds provide down payments of 20-30% of the home’s market value, so you (the buyer)
a) do not need to save a down payment
b) can take out a lower mortgage than you would need to buy a home on the open market
You must pay the closing costs ($10,000 to $12,000)
When you decide to sell, you sell the home back through the housing trust to another qualified buyer.
- You recoup your equity, i.e. the principal you paid down and the value of any authorized capital improvements you made
- If the home’s value increased while you owned it, you get 25 percent of the appreciation. (The remaining appreciation stays in the home to keep it affordable and pays for the program.)
- Homes cannot be rented or sold on the open market and must be owner occupied
- Homeowners are responsible for the maintenance and upkeep of their home and property
- Single family homes require a ground lease that gives ownership of the land to Champlain Housing Trust but allows full use of the property by the homeowner
- There is no time commitment to living in a shared equity home but you must agree to sell the home through CHT to another qualified buyer
The Shared Equity Program was created to provide homeownership and wealth-building opportunities for low-income Vermonters. In the last five years, with intention, a quarter of all Champlain Housing Trust buyers have been people of color. As homeownership has been one of the primary ways in which people in this country build wealth, increasing access to homeownership doesn’t only break the cycle of intergenerational poverty, it can also play an important role in addressing the racist policies that prevented Blacks and others access to the American Dream.
Contact Us for More Information:
Phone Line: 802-861-7373
Email: [email protected]