Affordable Homeownership: An Evaluation of Shared Equity Programs

Cornerstone Homeownership Innovation Partnership (CHIP) identifies and supports a set of leading nonprofit stewards of long-term affordable homeownership units, and helps build the evidence base around shared equity. Shared equity is a homeownership model that allows income-eligible families to purchase homes at below-market prices. In return for the subsidized purchase price, the owner’s potential capital gains from home resale are restricted.

This evaluation of nine shared equity programs in Texas, California, Vermont, New York, Tennessee, Utah, Washington, and Florida looked at the types of households the program enables to buy homes, as well as financial and neighborhood outcomes.

The study found that, within the study's sample:

• 96% of applicants were not currently homeowners and made on average 51% of their area's median income
• Of applicants bought a home with shared equity (20% bought without, and 44% did not buy a home at all)
• Shared equity purchasers had smaller mortgages than other applicant purchasers as well as similar non-applicant purchasers, and had lower monthly payments on all credit accounts; and
• No other differences were observed in non-mortgage and neighborhood outcomes.