Boyd went from debtor to homeowner in just three yearsfrom 2009 to 2012– thanks to an innovative homeownership plan called the shared-equity program. It works like this: Champlain Housing Trust offers a down payment for a home, paid for with government funds. Then CHT screens potential buyers, who are members of the trust, based on their assets and income. (To qualify, a family of four must earn $80,200 or less in gross annual income, they must not own another home, and they must not have significant assets outside of savings for retirement.)
The homeowner then gets a mortgage from a bank and pays the principal each month. Usually, the homeowner also pays for the closings costs and any upkeep and maintenance. When the homeowner decides to sell the property, he first must offer it back to the housing trust. Both the homeowner and housing trust share in the home’s appreciation. (That’s why it’s called “shared equity” — 25% of the appreciation goes to the homeowner and 75% to CHT.) The homeowner also recoups all of the equity he built up each month through making principal payments, as well as any money he has spent on capital improvements (a figure determined by an independent appraiser).
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This article originally appeared on The Next Economy, a joint project of The Atlantic and National Journal.
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