Brooklyn Law School Brooklyn Law School
BrooklynWorks BrooklynWorks
Faculty Scholarship
Spring 2022
Sharing Your Home with Strangers: Common-Interest Ownership Sharing Your Home with Strangers: Common-Interest Ownership
and Financing Options and Financing Options
Debra Bechtel
Crystal Liu
Ernira Mehmetaj
David Reiss
Follow this and additional works at: https://brooklynworks.brooklaw.edu/faculty
Part of the Property Law and Real Estate Commons
Sharing
Your
Home
With
Strangers:
Common-
Interest
Ownership and
Financing
Options
Debra
Bechtel,
Crystal
Liu,
Ernira
Mehmetaj,
and
David
Reisst
As
the
affordable
housing
crisis
in
the
U.S.
escalates,
housing
policy
analysts
and
advocates
are
re-examining,
modifying,
and
combining
ways
of
decreasing
the
costs
of
homeownership through
shared
owner-
ship
and shared
financing
while
also,
in
some
instances,
preserving
long-term
affordability.
This
Article
will
touch
upon the
vast
array
of
models
and
take
a
deep
dive
into
one
of
them,
the
relatively
new
shared
equity
financing
model.
That model
holds
some
promise
and
a
lot
of
peril
for
homeowners.
I.
TRADITIONAL
MODELS
OF
HOMEOWNERSHIP
AND
FINANCING
Before
the
modern
era,
homeowners
who
had
fee
simple
ownership
of
property
had
near-complete
control
of
it
pursuant
to
the
common
law
of
property:
every
owner's
home
was
essentially
their
castle
as
far
as
the
common
law
was concerned.
That level
of
personal
control
over
one's
home
does
not
really exist
anymore.
First, many
homeowners
live
in
some
type
of
communal
arrangement,
in
which
they
share
access
to
building
systems
like
HVAC
(heating,
ventilation,
and
air
conditioning),
plumbing,
and
elevators
in
condominium
buildings;
and
amenities
like
landscaping,
pools,
and
tennis
courts
in
common-interest
homeowner
communities.
Second,
local and
state
governments
impose
land
use
and
zoning
controls
that
affect nearly
every
parcel
of
property.
These
controls
limit
the
size
and
height
of
buildings,
the
location
of
utility
lines,
and
the
number
of
rooms
buildings
can
have,
among
many other
things.
Finally,
nearly
all
modern
homeowners
need
help
paying
for
their
homes,
so
they
take
out
mortgages
from
lenders.
Lenders
limit
homeowners'
control
by
putting
limits
on
financing,
sales,
and
renovations,
among
other
restrictions.
Today,
most people
do
not think
twice
about sharing
ownership
rights
with
other
homeowners.
After
all,
common-interest
ownership
models
of
t
Debra
and
David
are
professors
at
Brooklyn
Law
School.
Ernira
is
an
alumna
and
an
associate
at
Kriss
&
Feuerstein
LLP.
Crystal
is
an alumna
and
an
incoming
associate
at
K&L Gates
LLP.
Thanks
to
Madeline
Martinez and
Justin
Peralta
for excellent
research
assistance.
473
474
Washburn
Law
Journal
[Vol.
61
housing,
such
as
cooperatives,
condominiums,
and
homeownership
associa-
tions,
have
existed
for
well
over
a
hundred
years.'
As
cities
became
more
crowded
and
buildings
became
bigger,
some
potential
homeowners
became
interested
in
owning
or
controlling
just
a
portion
of
a
larger
building.
That
necessitated
cooperating
with
those
who
owned
the other
portions.
This
limited
individual
control
but
also
allowed
homeowners
to
share
the
cost
of,
and
responsibility
for,
maintenance
and
capital
repairs.
The
result
of
all
this
innovation
is
a
range
of
ownership
options
that
were
not imagined
in
the
preindustrial
age.
In
cooperatives,
residents
are
shareholders
in
a
corporation
that
holds
title
to
the
building.
2
In
addition
to
their
shares,
shareholders
receive
a
leasehold
interest
in
discrete
units
of
the
realty
owned
by
the
housing
cooperative.
3
On
the
other
hand,
the
condominium
model
divides
the
deed
for
a
parcel
containing
a
building
into
separate
deeds
for
each
unit,
or
cre-
ates
individual
unit
deeds
from
the
outset
if
the
condominium
is
built
from
scratch.
4
The
condominium
units
have
shared
control
of
the
building's
common
elements,
5
which
are
governed
by
a
condominium
association.
6
In
many
states,
the
formation
and
operation
of
condominiums
are
governed
by
statute.
7
1.
The
first
formal
housing
cooperative
on
record
was
founded
in
1862
in
Hamburg,
Germany.
About
Germany,
COOP.
HOUS.
INT'L,
https://www.housingintemational.coop/co-ops/germany/
[https://
perma.cc/D855-5PS6]
(last
visited
Feb.
25,
2022);
Gerald
Sazama,
A
Brief
History
of
Affordable
Housing
Cooperatives
in the
United
States,
at
1
(U.
Conn.,
Working
Paper
No.
1996609, 1996),
https://opencommons.uconn.edu/econwpapers/199609
[https://perma.cc/8LR2-ZY5C]
[hereinafter
Sazama
Working
Paper].
By
the early
twentieth
century,
housing
cooperatives
flourished
throughout
Europe, albeit
mainly
in
Germany
and
in
Scandinavian
countries.
Gerald
W.
Sazama,
Lessons
from
the
History
of
Affordable
Housing
Cooperatives
in
the
United
States:
A
Case
Study
in
American
Affordable
Housing
Policy,
59
AM.
J.
ECON.
&
Soc.
573,
576-77
(2000).
In
the
United
States,
the
first
housing
cooperative,
called
a
"home
club,"
was
founded
on
Eighteenth
Street
in
New
York
City
in
1876.
Michael
H.
Schill,
Joan
Voicu
&
Jonathan
Miller,
The
Condominium
v.
Cooperative
Puzzle:
An
Empirical
Analysis
of
Housing
in
New
York
City,
36
J.
L.
STUD.
275,
277
(2007).
It
was
not
until
after
World
War
I
that
housing
cooperatives
became
more
established
nationwide.
Sazama,
Lessons
from
the
History
of
Affordable
Housing
Cooperatives,
supra
at 577.
2.
VINCENT
D.
LORENZO,
NEW
YORK
CONDOMINIUM
AND
COOPERATIVE
LAW
ยง
3:9 (2nd
ed.
2021).
3.
Id.
Owners
of
cooperative
apartments
realize
their
leasehold
interest
in
the
form
of
a
proprietary
lease,
which
is
typically
set for
a
term
of
ninety-nine
years.
Schill
et al.,
supra
note
1.
4.
See
LORENZO,
supra
note
2,
at
ยง
3:1.
5.
See,
e.g.,
N.Y.
REAL
PROP. LAW
ยง
339-e
(McKinney
2022)
(providing
a
statutory
definition
of
the
term
"common
elements").
6.
See
Schill
et
al.,
supra
note
1,
at
278,
281-82.
Under New
York
State's
Condominium Act,
the
condominium
association
is
referred
to
as
the
"Board
of
Managers."
3
WARREN'S
WEED
NEW
YORK
REAL
PROPERTY
LAW
ยง
29.33
(John Blyth
ed.,
2021).
Because
of
the
need
to create
deeds
for
individual
resident
spaces
in
the
condominium
model, it
is
difficult
to
use
the
model
in
existing buildings
with
underlying
mortgages
unless
such
mortgages
can
be repaid
or
refinanced.
As
a
result,
the
condominium
model
is
used
primarily
in
new
construction.
7.
See
Schill
et
al.,
supra
note
1,
at
278 (discussing
the
passage
of
the
condominium-enabling
acts across
the
country
as a
precursor
to
the
proliferation
of
condominium
development
in
the
United
States during
the
mid-twentieth
century).
In
New
York
State,
for
example,
it
is
found
in
the
NY
Real
Sharing
Your
Home
with
Strangers
Cooperatives
have
been
particularly
popular
in
New
York
City
and
Washington
D.C.,
8
while condominiums
are
present
in every
state.
9
Both
models
can
also
be
used
to
connect
multiple
buildings
or
even
multiple
mobile
homes,
10
with
shared
ownership
of
common
elements
in
condo-
miniums
and
shareholder
ownership
of
the
title-holding
entity
in
a
cooper-
ative.
Similarly,
owners
of
single-family
homes
in
a
subdivision
may
cede
certain
rights
to
a
homeowners
association,
which,
in turn,
maintains
common
spaces
and
shared
amenities
in
the
subdivision
and
enforces
community
standards
regarding
the
design
and
maintenance
of
the
homes.
1
1
And
today,
it
is
the rare
homeowner
who
thinks
twice about
why
mortgages
are
part
of
so
many
real estate
transactions.
Real
estate
is
expensive,
and
few
have
the
money
to
pay
for
a
home
all
in
cash.
12
As
a
result,
people
enter
into
transactions
with
mortgage
lenders
and
are
exposed
to
all
of
the
risks
that
come
with
that
type
of
financing.1
3
The
lender
can
declare
the
homeowner
to
be
in
default,
and
even
foreclose
on
the
home-
owner's
interest
in
the
property,
if
the
homeowner
does
not
comply
with
the
terms
of
the
mortgage.
14
Additionally,
homeowners
rarely
think
twice
about
the
government's
ability
to
limit
the
use
of
land.
Zoning
and
building
codes
have
also
been
around
for
more
than
a
hundred
years.
Historically,
zoning
has
been
used
to
limit
the
number
of
units
of
housing
that could
be
built
on
a
parcel
of
land.
15
More
recently,
however,
government
has
sought
to
incentivize
or
legislate
that
parcels
of
land
must
include
multiple
units
of
housing
if
the
owner
were
to
develop it.
16
The
recent
move
to
upzone
all
single
family
Property
Law
Article
9-B.
Condominium
Act,
N.Y.
REAL
PROP. LAW
ยง
Ch.
50,
art.
9-B
(McKinney
2021).
8.
Schill
et al.,
supra
note
1,
at
280.
9.
U.S.
CENSUS
BUREAU,
STATISTICAL
BRIEF:
CONDOMINIUMS
2
(May
1994),
https://www2.cens
us.gov/library/publications/1994/demographics/sb94-1
l.pdf
[https://perma.cc/XG87-RSAE].
10.
Anne
Wallace
Allen,
Mobile
Park
Co-Ops
Thrive
in
Vermont,
SEVEN
DAYS
(Apr.
19,
2021,
4:45
AM),
https://www.sevendaysvt.com/OffMessage/archives/2021/04/19/mobile-home-park-co-ops-
thrive-in-vermont
[https://perma.cc/3YDv-NRNP];
Daniel
Zwerdling,
When
Residents
Take
Ownership,
A
Mobile
Home
Community
Thrives,
NPR
(Dec.
27,2016,4:08
PM),
https://www.npr.org/
201
6/12/27/503052538/when-residents-take-ownership-a-mobile-home-community-thrives
[https://perma.cc/X3JW-CTQH].
11.
Record
Number
of
Homeowners
Live
in
HOA
Communities,
NAT'L
ASSOC.
OF
REALTORS
(Sep.
23,
2020),
https://magazine.realtor/daily-news/2020/09/23/record-number-of-homeowners-live-in-hoa-
communities
[https://perma.cc/27GT-6SQZ].
12.
N.
ERIC
WEISS
&
KATIE
JONES,
CONG. RSCH.
SERV.,
R24995,
AN
OVERVIEW
OF THE
HOUSING
FINANCE
SYSTEM
IN THE
UNITED
STATES,
at
Summary
(2017),
https://sgp.fas.org/crs/misc/R42995.pdf
[https://perma.cc/7YP5-39VB].
13.
See
id.
14.
Id.
15.
19
POWELL
ON
REAL
PROPERTY
ยง
79D.03
(Michael
Allen
Wolff
ed.,
2021).
16.
See
Sarah
Mervosh,
Minneapolis,
Tackling
Housing
Crisis
and
Inequality,
Votes
to
End
Single-
Family
Zoning,
N.Y.
TIMES
(Dec.
13,
2018),
https://www.nytimes.com/2018/12/13/us/minneapolis-
single-family-zoning.html
[https://perma.cc/ZER5-KvKP].
47
5
2022
]
Washburn
Law
Journal
zones
to
allow
multifamily
housing
in
cities
like
Minneapolis
is an
example
of
this
relatively
new
approach
to
encourage
multiple
units
of
housing
on
parcels that
had been
zoned
as
single
family.
1 7
Building
codes
have
also
limited
how
buildings
can
be
used
by
owners
and
tenants
alike.
Finally,
like
ownership,
mortgage
financing
can
be
sliced
and
diced
in
many
ways.
Both
the government
and
private
sector
have
reduced
down
payment
amounts
to
make
loans
more
accessible
to
borrowers
and
thereby
expand
homeownership
opportunities.
18
This
strategy
has
reduced
the
size
of
standard
down
payments
significantly
over
time.
19
Lenders
have
also
reduced,
and
even
eliminated
monthly
payments,
more
often
for
existing
homeowners
than
prospective
homeowners.
Reverse
mortgages,
for
in-
stance,
allow
homeowners
and
cooperative
owners
to
borrow
and
not
make
monthly
payments.
20
Even new
homeowners
can
sometimes
get
in
on
the
action
with interest-only
loans
2
1
or
adjustable-rate
mortgages.
22
Such
loans
allowed
homeowners
in
the
early 2000s
to
have
negative
amortizing
loans
in
which the
amount
owed
increases
over
some
period
of
time.
23
A
home-
owner
could
also
give up
some
of
the
upsides
of
owning
a
home with
a
shared
appreciation
mortgage,
in
which
the
lender
charges
a
lower
interest
rate
in
exchange
for
some
of
the
upsides
on
the
sale
of
the
home.
24
Or,
the
17.
Id.
18.
See Jill Chodorov
Kaminsky,
Zero-Down
Home
Loans
Are
Back.
Be
Very
Leery.,
WASH.
POST
(Feb.
19,
2018),
https://www.washingtonpost.com/news/where-we-live/wp/2018/02/12/zero-down-ho
me-loans-are-back-be-very-leery/
[https://perma.cc/YZ9M-ETJ8];
USDA
Offers
No
Down
Payment
Options
for
Rural
Home
Buyers,
USDA
(Oct.
15,
2014),
https://www.rd.usda.gov/newsroom/news-rel
ease/usda-offers-no-down-payment-options-rural-new-york-home-buyers
[https://perma.cc/3HMC-YS
Xv].
19.
See Kaminsky,
supra
note
18.
20.
Reverse
Mortgages,
FTC
CONSUMER
INFO.,
https://www.consumer.ftc.gov/articles/0192-rev
erse-mortgages
[https://perma.cc/T55P-8LKH]
(last
visited
Feb.
25, 2022).
21.
Stephan
F.
Thode
&
Richard
Kishe,
The
Zero-Coupon/Interest-Only
Fixed-Rate
Mortgage:
An
Alternative
for
Funding
Low-
to-Moderate
Income
Households,
9
J.
REAL
EST.
RSCH.
263,
265-66
(1994);
Amy
Fontinelle,
How
Do
Interest-Only
Mortgages
Work?,
INVESTOPEDIA
(July
3,
2021),
https://www.investopedia.com/artices/managing-wealth/042516/how-interestonly-mortgages-
work.asp
[https://perma.cc/KLS9-QTY2].
22. Jo
Carrillo,
Dangerous
Loans:
Consumer Challenges
to
Adjustable
Rate
Mortgages,
5
BERKELEY
BUs.
L.
J.
1,
28-29
(2008); Dan Levine,
Wells
Fargo
to
Settle
Lawsuit
over
Pick-a-Payment
Loans,
REUTERS
(Dec.
14,
2010, 6:54
PM),
https://www.reuters.com/article/wellsfargo-settlement/wel
Is-fargo-to-settle-lawsuit-over-pick-a-payment-loans-idINN
1427719820101215
[https://perma.cc/SBU7-LUVF].
23.
Christopher
J.
Mayer,
Karen
M.
Pence
&
Shane M.
Sherlund,
The
Rise
in
Mortgage
Defaults
13-14
(Fed.
Rsrv. Bd.,
Working
Paper
No. 2008-59,
2008),
https://www.federalreserve.gov/pubs/feds/
2008/200859/200859pap.pdf
[https://perma.cc/7XSW-KJ36].
24.
Ernira
Mehmetaj
&
David
Reiss,
The
Promise
and
Perils
of
Shared
Equity
Financing,
35
PROB.
&
PROP.
46,47
(2021); Julia
Kagan,
Shared
Appreciation
Mortgage
(SAM),
INVESTOPEDIA
(Feb.
13,
2022),
https://www.investopedia.com/terms/s/shared-appreciation-mortgage.asp
[https://perma.cc/
B5FC-UTZQ].
476
[Vol.
61
Sharing
Your
Home
with
Strangers
downside
of
owning
a
home
can
be
limited
with non-recourse
debt,
either
through
the
mortgage terms
or
an
applicable
statute.
25
The
reverse
mortgage,
interest-only
mortgage,
and
shared-appreci-
ation
mortgage
products
outlined
above
all
have
established
a
solid
grounding
in
law
and
practice
due
to
their
ongoing
presence
in
the
housing
finance
industry.
But
there
are
all
sorts
of
new
ways
to
slice
and
dice
the
rights
and
responsibilities
of
homeownership
that
go
even
further
beyond
those
approaches,
and
importantly,
can be
used
to
increase
access
to
homeownership
for
low and
moderate
income
households.
Across
all
of
these
newer
models,
low
to
moderate
income
households
are
able
to
invest
a
smaller
quantity
of
equity
in
a
home
than
afforded
by
more
traditional
financing.
26
Notwithstanding
that
fact,
some
newer
shared
equity
models
of
homeownership
continue
to
present
risks
to
potential
homeowners,
risks
that
are
not
readily
apparent.
As
with
any
innovation,
these
models
also
come
with
trade-offs
for
owners
and
their
communities.
Innovators
in
both
the
for-profit
and
not-for-profit
sectors
have
been
thinking
about
other
ways
that
homeowners
can
share
aspects
of
ownership.
Ownership
can
be
shared through
community
land
trusts
to
ensure
long-
term
housing
affordability.
And
ownership
of
functions
such
as
kitchens
and
living
spaces
can
be
shared
through
co-living
arrangements.
Finally,
ownership
can
be
shared
through
joint
equity
investments.
We
look
at
those
options
below.
II.
SPLITTING
OWNERSHIP
FOR
LONG-TERM
AFFORDABILITY
Taking
note
of
the
hurdles
individuals
face
to
purchase
a
new
home
and
their
struggles
to
maintain
them,
various
government
agencies
and
not-
for-profit
entities
stepped
in
to
alleviate
some
of
the
burdens
of
home-
ownership.
In
return,
they often
imposed
restrictions
beneficial
to
the
com-
munity
or
to
other
residents.
Using
the
condominium,
cooperative,
and
homeowner
association
ownership
structures
outlined
above,
these
mod-
els
27
have
created
long-term,
affordable
homeownership
opportunities
25.
Dov Solomon
&
Odelia
Minnes,
Non-Recourse,
No
Down
Payment
and
the
Mortgage
Meltdown:
Lessons
from
Undercapitalization,
16
FORDHAM
J.
CORP.
&
FIN.
L.,
529,
533-34
(2011);
Julia
Kagan,
Non-Recourse
Debt,
INVESTOPEDIA
(May
13,
2020),
https://www.investopedia.com/terms
/n/nonrecoursedebt.asp
[https://perma.cc/982Y-MU5D].
26.
See
infra
notes
34-36
discussing
community
land
trusts,
deed-restricted
programs,
and
limited
equity housing
cooperatives.
27.
See
infra
notes
33-58
and
accompanying
text.
2022
]
477
478
Washburn
Law
Journal
[Vol.
61
through
alternative
shared
equity
methods
such
as
community
land
trusts,
2
8
deed-restricted
programs,
2
9
and
limited
equity
housing
cooperatives.
30
Community
land
trusts
increase
affordability
through
a
dual
ownership
model,
by
which
one
party
(usually
a
not-for-profit
organization
with
some
residents
on
its
board
of
directors)
holds
title
to
the
land,
while
the
resident
holds
title
to
the
building
located
on
the
land.
3
1
Because
the
cost
of
the
land
itself
is
eliminated
from
the
purchase
price
of
a
home,
homeowners
can
more
easily
afford
the
homes,
thereby
encouraging
homeownership
and
making
it
more
feasible
for
low-income
families
to
purchase.
32
The
home-
owner's
interest
is
subject
to
a
ground
lease
or
deed
restrictions
regarding
sale
price,
and
income
limits
designed
to
maintain
affordability
for
future
buyers.
3
3
Community
land
trusts
may
also
require
primary
residence
and
may
limit
subletting.
34
Furthermore,
the
homeowner
is
allowed
to
benefit
from
some
portion
of
the
price
appreciation.
35
The
great
advantage
of
this
model
is
that
the
not-for-profit
ownership
entity
can
enforce
these
deed
and
ground
lease
restrictions
more
easily
than
it
could
if
they
were
contained
in
a
condominium
homeowner
agreement
or
cooperative
proprietary
lease.
36
In
addition,
the
not-for-profit
entity
also
provides
technical
assistance,
sup-
port,
and
even
rehabilitation
funding
for
the
home
or
unit
owners.
3
7
One
28.
See
Community
Land
Trusts
(CLTs),
COMMUNITY-WEALTH.ORG,
https://community-
wealth.org/strategies/panel/clts/index.html
[https://perma.ce/MVA4-6YU6]
(last
visited
Feb.
25,
2022).
29.
See
Deed-Restricted
Homeownership,
LOC.
HOUS.
SOLS.,
https://www.localhousingsolutions.
org/housing-policy-library/deed-restricted-homeownership/
[https://perma.cc/S4FZ-5TW2]
(last
visited
Feb.
25,
2022).
30.
See
BRETT
THEODOS,
ROB
PITINGOLO,
SIERRA
LATHAM,
CHRISTINA
STACY,
REBECCA
DANIELS
&
BRENO
BRAGA,
AFFORDABLE
HOMEOWNERSHIP:
AN
EVALUATION
OF
SHARED
EQUITY
PROGRAMS
4
(2017);
Limited
Equity
Cooperatives,
LOC.
HOUS.
SOLS.,
https://www.localhousingsoluti
ons.org/housing-policy-library/limited-equity-cooperatives/
[https://perma.cc/PP5K-KGFW]
(last
visi-
ted
Feb.
25,
2022).
31.
Community
Land
Trusts,
supra
note
28.
32.
Id.
33.
Id.
34.
Andrew
Decker,
Community
Land
Trusts
and
State
Legislation:
A
Model
Act
to
Enable
This
Affordable
Housing
Tool,
AFFORDABLE
HOUS.
&
CMTY
DEV.
L.
489,
507
(2018).
35.
Deed-Restricted
Homeownership,
supra
note
29.
36.
A
distinctive
feature
of
a
community
land
trust
("CLT")
vis-a-vis
other
shared
equity
homeownership
models
is
its
focus
on
"community
control"
realized
by
the
inclusion
of
a
diverse
cross-
section
of
members
of
its
catchment
community-such
as
community
activists,
other
non-profit
professionals,
and
elected
officials-to
serve
on
the
CLT's
Board
of
Directors
("Board").
Anna
Carlsson,
Shared
Equity
Housing
a
Review
of
Existing
Literature,
JOINT
CTR.
Hous.
STUDIES
OF
HARV.
U.
(Nov.
21,
2019),
https://www.jchs.harvard.edu/research-areas/student-work/shared-equity-housing-
review-existing-literature
[https://perma.cc/58CE-6SR3].
Accordingly,
unlike
even
limited
equity
cooperatives,
CLTs
are
steered
by
a
board
that
is
not
fully
comprised
of
residents
with
an
equity
stake
in
the
CLT's
financial
future.
See
id.
at 6,
9.
Thus,
as
compared
to
decision-making
bodies
in
limited
equity
cooperatives,
a
CLT's
board
is
more
incentivized
to
enforce
affordability
caps
on
deed
restrictions
or
cooperative
proprietary
leases
than
that
of
a
limited
equity
cooperative.
See
JOHN
EMMEUS
DAVIS,
NAT'L
HOUS.
INST.,
SHARED
EQUITY
HOMEOWNERSHIP:
THE
CHANGING
LANDSCAPE
OF
RESALE-
RESTRICTED,
OWNER-OCCUPIED
HOUSING
18
(2006),
https://groundedsolutions.org/sites/default/files/
2018-10/13%202006-Shared-Equity-Homeownership.pdf
[https://perma.cc/VDG7-M9EA].
37.
Decker,
supra
note
34,
at
496.
Sharing
Your
Home
with
Strangers
downside
for
the
residents
is
that
the
sale limits
may
not
allow
heirs
to
take
the
property
automatically
when
the
resident
dies,
or
may
even
impede
the
assignment
of
the
deed
or
ground
lease
to
a
surviving
family
member.
38
In
addition,
when
there
is
a
sale,
it
must be
at
a
price
below
appraised
value
to
a
qualified
low-income
buyer.
39
And
homeowners
may
receive
only
a
portion
of
any
increase
in
the
value
of
the
home.
40
Limited
equity
housing cooperatives
are
similar
to
traditional
co-ops
but
are
made
available
to
income-eligible
individuals
at
affordable prices.
4 1
Unlike
the land trust
model, though,
income and
price restrictions
are
not
generally
included
in
a
deed
or
ground
lease,
but
rather
in
the
proprietary
lease,
the
by-laws,
and
possibly
a
regulatory
agreement
with
a
government
agency.
42
In
some
states, such
as
Vermont,
there
are
limited equity
cooperative
statutes
that
also
require
specific
restrictions
in
the
certificate
of
incorporation
of
the
owning
corporation.
4 3
Like
the
other affordable
housing
models,
the
current
homeowner's
ability
to
profit
from
price
appreciation
is
capped
at
the
time
of
resale.44
The
model
provides
more
autonomy
for
the
homeowner
than
the
land
trust
model,
but
it
also
provides
less
financial
security
if
the
homeowner
or cooperative
corporation encoun-
ters financial
problems.
In
the
limited equity
cooperative
model,
not-for-
profit
corporations
with
an
ownership
stake
play
no
supporting
role.
III.
SHARING
LIVING
SPACE
TO
INCREASE
AFFORDABILITY
(FORMERLY
SINGLE
ROOM
OCCUPANCY
BUILDINGS)
Another
way
of
reducing housing
costs
for
low-income households
is
to
design
housing
to
include
shared
kitchens
and bathrooms,
in
addition
to
the more
typical
shared
amenities
found
in
multifamily housing
such
as
lobbies,
laundry
rooms,
and
community
rooms. The approach
harkens
back
to
an
old
housing
model,
ultimately
much-maligned,
called single
room
occupancy
buildings
or SROs.
These were
originally referred
to
as
38.
See
Janet
Hamer,
CLTs
Keep
Housing
Affordable,
PARTNERS
IN
CMTY.
&
ECON.
DEV.
(2006),
https://community-wealth.org/sites/clone.community-wealth.org/files/downloads/article-hamer.pdf
[https://perma.cc/G2RP-wCAT]
("There
are
also
other restrictions
on
...
transfer
to
heirs
.....
39.
See
Decker,
supra
note
34,
at
491.
40.
Martin
Moylan,
Advocates
Eye
Community
Land
Trusts
to
Increase
Access
to
Homeownership,
MPR
NEWS
(Feb.
4,
2020,
10:00
AM),
https://www.mprnews.org/story/2020/02/04/advocates-eye-
community-land-trusts-to-increase-access-to-home-ownership
[https://perma.cc/8TDE-7L5V].
By
con-
trast,
condominium
units that transfer
fairly
easily
to
heirs
and
cooperative units,
are
often governed by
a
proprietary
lease
that allows
"financially
responsible"
heirs
to
take
over
without
review by
the
board
of
directors.
Id.
41.
Limited
Equity
Cooperatives,
supra
note
30.
42.
See
generally
Debra
Bechtel,
New
York
City
Low-Income
Cooperatives:
A
Guide
for
Practitioners,
48
N.Y.
REAL
PROP.
L.
J.
17
(Spring/Summer
2020).
43.
VT.
STAT.
ANN.
tit.
11,
ยง
1598
(West
2021).
44.
Limited
Equity
Cooperatives,
supra
note
30.
2022
]
479
Sharing
Your
Home
with
Strangers
IV.
ENHANCING
AFFORDABILITY
THROUGH
SHARED
EQUITY
FINANCING
51
Whether
ownership
is
shared
or
not,
shared
responsibility
for
financing
a
home
can
make
it
more
affordable.
Fintech
companies
have
recently
stepped
onto
the
shared
equity
financing
playing
field,
but
the
concept
has
been
around
for
quite
some
time.
A
shared
equity
financing
agreement
typically
involves
two
parties:
a
potential
homeowner
and
an
investor.
52
The
investor
invests
alongside
the
potential
homeowner,
and,
in
return,
owns
a
percentage
of
equity
in the
new
home.
53
If
the
investor
does
not
provide
all
of
the
additional
equity
that
the
prospective
homeowner
needs,
the
homeowner
can
apply
for
a
mortgage
to
make
up
the
difference.
54
The
homeowner
would
then
typically
occupy
the
home,
pay
all
ex-
penses
in
connection
with owning
it
(taxes,
insurance,
etc.),
and
maintain
it
according
to
the
investor's
requirements,
without
making
any
monthly
payments
to
the
investor.
55
Upon
the
maturity
of
a
set
investment
term
(or
an
earlier
termination
due
to
an
agreed-upon
condition
like
a
sale),
the
investor
would
receive
the
initial
amount
of
its
investment,
plus
its
equity
share
in
the
home's
value.
56
To
pay
off
the
investor,
the
homeowner
could
refinance
the
loan,
use
proceeds
from
selling
the
property,
or pay
off
the
investor
from
savings.
57
A.
History
of
Shared
Equity
Financing
In
1976,
equity
financing
became
desirable
because
Section
280A
of
the
Internal
Revenue
Code
was
written
to
allow
for
the
mixed
tax use
of
a
single
property,
permitting
an
investor
to
claim
certain
tax
deductions.
58
Section
280A
was
targeted
at
equity sharing
owners.
59
It
allows
the
oc-
cupier
to deduct
mortgage
interest
and
property
taxes,
and
the
investor
to
deduct
depreciation,
all
on
the
same
property
at
the
same
time.
6
0
To
qualify
/perma.cc/V2RL-VQCG].
51.
The
remainder
of
this
Article
builds
on
Mehmetaj
&
Reiss,
supra
note
24.
52.
James
Chen,
Shared
Equity
Finance
Agreements,
INVESTOPEDIA
(Oct. 21,
2020),
https://www
.investopedia.com/terms/s/sharedequityfinanceagreements.asp
[https://perma.cc/Q6LK-8BUG].
53.
Id.;
How
It
Works,
NOAH,
https://www.noah.co/how-it-works
[https://perma.cc/436U-4XYR]
(last
visited
Feb.
26,
2022).
54.
See
Still Have
Questions?
We
Have
Answers,
NOAH,
https://www.noah.co/faq
[https://perma.
cc/8TL6-LEG8]
(last
visited
Feb. 26,
2022).
55.
See
id.
56.
See
id.
57.
See
id.
58.
See
Ralph
v.
Switzer,
Jr.
&
Kathleen
K.
Hallloway,
Lending
or
Renting
to
Offspring
May
Benefit
Taxpayers,
TAX'N
FOR
ACCT.
355,
356-57
(1995).
59.
See
id.
60.
See
John
David
Zook,
Family
Tax
Planning
With
Shared
Equity
Financing
Setups,
56
TAX'N
FOR
AccT.
84,
86
(1996).
2022]
481
Washburn
Law
Journal
for
depreciation
deductions,
the
investor
must
collect
"fair
rental"
from the
occupier.
6
1
Thus,
it
is
important
to
note that
Section 280A
does
not
apply
to
the
shared
equity
financing
model
explained
below
because
the
occupier
does
not
pay
rent.
However,
while
Section
280A
does
not
apply
to
the
shared
equity
financing
model
explained
below,
it
popularized
the
notion
of
splitting
ownership
between
an
occupant
and
an
investor.
The
most
common
form
of
equity
sharing
is
when parents
share
in the
purchase
and
cost
of
main-
taining
a
house
used by
their
child
as
a
principal
residence.
62
According
to
the
shared
equity
agreement,
the
parents
would
then
rent
out
their
portion
of
the home
to
the
child
and
pay
a
portion
of
the
mortgage
payment.
63
The
parents
would
report
the
rent
they receive
from
the
child
and
receive
the
annual
tax
benefits
generally
available
from
renting
real
estate.
6
4
Ad-
ditionally,
the
parents
can
deduct
their
percentage
share
of
the
mortgage
interest
and
taxes,
the
maintenance
expenses
they
pay,
and
depreciation
based
on
their
percentage
share
of
the
property's
depreciable
basis.
65
Various
government
agencies
and
not-for-profit
entities saw
another
opportunity
to create
long-term
affordable
homeownership
programs
through
shared
equity
financing.
66
In
return
for
providing
a
potential home-
owner
a
subsidy,
these
agencies
and
entities
would
retain
a
percentage
of
a
home's
appreciation
at
the time
of
resale.
67
These agencies
and
entities
would then
reinvest
the
funds
they
receive
from
the
home's
appreciation
in
value
into
subsidies
provided
to
new
homeowners,
thereby
recirculating
funds
available
for
affordable
housing
to
more
income-eligible
house-
holds.
68
This
model
essentially
bridged
the
gap
between
the
financing
homeowners
could
obtain and
the
actual
market
cost
of
purchasing
a
home.
These
programs
were
designed
with
long-term
affordability
in
mind,
while
also
allowing
the
homeowner
a
share
of
any
appreciation.
69
These
programs
vary
significantly,
but
homeowners
can
often
accrue
significant
equity
with
some
of
them.
70
Even
with
resale
price
restrictions
designed
to
limit
the
sale
price
so
that
the
property
remains affordable
to
other low-
61.
Id.
at
84.
62.
See
id.
63.
Id.
64.
Id.
at
86.
65.
Id.
66.
See
Paths
to
Homeownership
for
Low-Income
and
Minority Households,
U.S.
DEP'T
HOUS.
&
URB.
DEV.
(2012),
https://www.huduser.gov/portal/periodicals/em/EM_Newsletter_Fall_2012_FNL.pd
f
[https://perma.cc/7ZJR-DF2K];
THEODOS
ET
AL.,
supra
note
30, at
4, 9,
35
(2017).
67.
Paths
to
Homeownershipfor
Low-Income
and
Minority
Households,
supra
note
66, at
19.
68.
Id.
69.
See
id.
at
20.
70.
Id.
482
[Vol.
61
2022]
Sharing
Your
Home
with
Strangers
483
income
homebuyers,
homeowners
often
earn
significant
returns
when
selling
their
homes.
7 1
These
programs
have
also
led
to lower
delinquency
and
foreclosure
rates
among
shared
equity
homeowners
when
compared
with
homeowners
of
market-rate
housing.
72
Overall,
the
below-market-rate
reduces
the
risks
that
homeowners
will
lose
money
in
a
declining
market
and
could
also
help
homeowners
increase
their
savings.
73
Additionally,
governmental
and
not-for-profit
shared
equity
programs
benefit
from
transparency,
in
that they
generally
provide
clear terms
about
the
equity
sharing
arrangement.
74
This
transparency
is
less
available
in
the
private
shared
equity
financing
sector,
as
shall
be
seen
below.
75
Some
local
governments,
including
New
York
City,
have
a
long
his-
tory
of
developing
shared
equity
programs
to
address
housing
and
economic
disparities.
New
York
City's
Department
of
Housing
Preservation
and
Development,
Economic
Development
Corporation,
and
Department
of
Worker
and
Consumer
Protection
have
recently
issued
a
Shared
Equity
Request
for
Information
("RFI").
76
As
the
RFI
notes,
and
as
summarized
above,
New
York
City
has
engaged
in various
shared
equity
strategies
over
the
past
few
decades,
including
limited
equity
cooperatives,
home-
ownership
units,
mutual
housing
associations,
and
community
land
trusts.
7
7
Colleges
and
universities
have also
relied
on
various
shared
equity
financing
and
shared
appreciation
mortgages
to
help
their
faculty
members
afford
to
live
in
high-cost
regions.
These
programs
are
designed
for
relatively
high-income
borrowers
who
have
little savings,
but
the
lessons
and
strategies
may
be
applicable
to efforts
to
support
low-income
home-
owners
as
well.
Princeton
University
has
one
of
the few
shared
equity
financing
programs
in
higher
education.
78
It
is
structured
as
a
tenancy
in
common,
in
which
the
university
has
a
1/3
interest
in
the
property
(and
receives
1/3
of
the
appreciation,
subject
to
certain
adjustments
upon
sale).
79
The
program
assists the
university
in
its
recruitment
efforts
for
tenured
71.
See
id.
at
20,
24.
72.
See
id.
at
20.
73.
Id.
74.
See
Mehmetaj
&
Reiss,
supra
note
24, at
4,
5.
75.
See
id.
76.
Shared
Equity
RFI,
NYC
DEP'T
HOUS.
PRES.
&
DEv.,
https://wwwl.nyc.gov/site/hpd/servic
es-and-information/shared-equity-rfi.page
[https://perma.cc/3Y9D-TM3U]
(last
visited
Feb.
26,
2022).
77.
Id.
78.
See
Tenancy-in-Common
Program,
PRINCETON
UNIV.,
OFF.
FIN.
&
TREASURY,
https://financ
e.princeton.edu/risk-management-tax-rents-mortgages/mortgages/tenancy-common-program
[https://perma.cc/YX93-JX2N]
(last
visited
Feb.
26,
2022).
79.
Id.
Washburn
Law
Journal
faculty
members
by
allowing
them
to
purchase
a
single-family
home
in
the
high-cost
region
of
southern
New
Jersey.
80
B.
New
Private
Shared
Equity
Financing
Options
The
private
sector
jumped
on
board
the
shared
equity
financing
bandwagon
more
recently.
Players
such
as
Unison,
81
established
in
2004,
and
others such
as
Hometap,
82
established
in 2017,
have
been
extending
their
reach
to
more
states.
The
chart
below
outlines
the terms
that
different
players
in
the
private
sector
offer:
2017
2016
14
states
9 states
+
DC
$15,000
8
7
[]
$600,00088
$500,000
301
None
10
years
3%
10
years
Servicing
Fee
89
(incl.
underwriting
and
filing
fees)
of
$2,000
or
3%
of
the
201J
LUU4
16
states
+
28
+
DC
DC
$25,000
$30,000
$-500,000
$500,000
None
None
30
years
30
years
3-5%
of
[
the
financing
amount,
appraisal,
and
third-
party
80.
See
id.
81.
See
generally
Welcome
Home,
UNISON,
https://www.unison.com/
(last
visited
Feb.
26,
2022).
82.
Mary
Ann
Azevedo,
Hometap
Closes
on
$60M
to
Let
People
Tap
Into Their
Home
Equity
Without
Taking
Out
a
Loan,
TECH
CRUNCH
(Dec.
6,
2021),
https://techcrunch.com/2021/12/06/hometa
p-closes-on-60m-to-let-people-tap-into-their-home-equity-without-taking-out-a-loan/
[https://perma.c
c/THY6-BJDD].
83.
Not
confirmed
by
Hometap.
See
Hometap
Is an
Investor,
Not
a
Lender,
HOMETAP,
https://w
ww.hometap.com/how-it-works/
[https://perma.cc/6PWD-65AU]
(last
visited
Feb.
26,
2022).
84.
See
Still
Have
Questions?
We
Have
Answers,
supra
note
54.
85.
How
Point
Works,
POINT,
https://point.com/how_it_works
[https://perma.cc/2U68-SB38]
(last
visited
Feb.
26,
2022).
86.
See
Welcome
Home,
supra
note
81.
87.
Aly
Yale,
Hometap
vs.
Unison:
Home
Equity
Comparison,
LENDEDU
(Feb.
2,
2022),
https://
lendedu.com/blog/hometap-vs-unison-home-equity/
(https://perma.ccIU5Z7-RWST].
88.
Id.
89.
Tap
Into
Your
Home's
Equity-And
Owe
Nothing
for
10
Years,
NOAH,
https://www.noah.co/
home-value-investment
[https://perma.cc/W8LJ-G842]
(last
visited
Feb.
26,
2022).
I
[Vol.
61
484
Sharing
Your
Home
with
Strangers
investment
fees'
amount,
whichever
is
higher,
plus
third-party
fees
(incl.
appraisal)
To
understand
how
these
private
players
function,
it is
important
to
illustrate
how
they
structure
a
deal.
Take
Point,
for
example.
First,
it
determines
a
property's
"risk-adjusted
home
value."
9 1
It
does
this
by
subtracting
the
product
of
the
current
home
value
(as
determined
by
an
appraiser)
and
the
valuation
adjustment
(a
percentage
that
typically
ranges
from
15% to
20%)
from
the
current
home
value.
92
For
illustrative purposes,
if
an
appraisal
determined
that
a
home's
value
is
$500,000
and
Point's
valuation
adjustment
was
16%,
the
risk-adjusted
home
value
would
be
$420,000
($500,000
-
($500,000
*
16%)).93
Point
offsets
its
risk
through
the
valuation
adjustment,
thereby
reducing
its
exposure
to
downturns
and
amplifying
its
returns
in
a
rising
market.
9
4
In
an
appreciation
scenario,
the
total
payout
to
Point
would
be
calculated
by
first
determining
the
difference
between
the
increased
home
value
and
the
adjusted
home
value,
then
multiplying
that
number
by
the
percentage
of
the
equity
share,
then
adding
the
original
funding
amount.
95
Once
again,
for
illustrative
purposes,
if
the
increased
home
value
in
year
10
was
$854,100,
then
the
total
payout
to
Point
would
be
$179,400.96
This
payment
is
equivalent
to
(($854,100
-
$420,000)
*
30%
+
$50,000
(original
funding
amount)),
adjusted
for
costs
and
fees.
97
Accordingly,
Point's
in-
vestment
gain
is
$129,400,
and
its
annualized
return
on
investment
("ROI")
is
13.63%
over
ten
years.
In
contrast,
in
a
deprecation
scenario,
when
a
property's
value
is
de-
creased
to
$375,000,
based
on
the
same
calculation
method
stated
above,
its
payout
would
be
$36,600,
representing
an
investment
gain
of
-$13,400
and
90.
What
Are
the
Fees
Associated
With
a
Point
Investment?,
POINT,
https://help.point.com/artiel
e/38-point-service-fees
[https://perma.cc/J45F-JUCE]
(last
visited
Feb.
26,
2022).
91.
See
How
Much
a
Homeowner
Could
Get
Today,
and
How
Much
It
Would
Cost.,
POINT,
https://point.com/calculator
[https://perma.cc/WW4H-2PUU]
(last
visited
Feb.
26,
2022).
92.
See
id.
("Because
Point
shares
in
downside,
Point
applies
a
Risk
Adjustment
of
15%
to
20%
to
offset
small
declines
in
home value
and
protect
its
initial
investment.").
93.
See
id.
94.
See
id.
95.
Figures
used
in
the
calculation
were
taken
from
the
Point's
website.
See
id.
96.
See
id.
97.
See
id.
("In
exchange
for
Point's
investment
today,
Point
receives
a
share
in
the
home's
appreciation
above
the
Risk-Adjusted
Home
Value.").
485
2022
]
Washburn
Law
Journal
an
annualized
ROI
of
-3.07%
over
ten
years.
98
Once
again,
for
illustrative
purposes,
this
payout
is
equivalent
to
(($375,000
-
$420,000)
*
30%
+
$50,000
(original
funding
amount)),
adjusted
for
costs
and
fees.
99
Something
to
keep
in
mind
when
reviewing
depreciation
scenarios
is
that many
borrowers,
under
traditional
mortgages,
escape
deficiency
judg-
ments
when
their
home
loses
significant
value.
But
with
the
depreciation
scenario
described
above,
the
homeowner
would
still
owe
Point
a
payout
even
if
the
homeowner
had
no
equity
left
in
the
property.
A
home
would
have
to
depreciate
significantly
for
Point
to
be
wiped
out completely.
C.
Homeowner
Expectations
in
Shared
Equity
Financing
Agreements
The
expectations
for
the
resident
homeowners
(as
opposed
to
the
non-
resident
investor
homeowner)
in
shared
equity
financing
agreements
are
similar
to
those
in
more
typical
ownership
structures.
In
a
shared
equity
agreement,
100
the
resident
homeowner
pays
all
taxes,
assessments,
and
in-
surance.
10 1
The
homeowner
10
2
is
also
expected
to
maintain
and
repair
the
property
as
needed
and
ensure
compliance
with
all
applicable
laws.
103
Ad-
ditional
homeowner
expectations
in
shared
equity
agreements
concern
mon-
etary
issues.
Homeowners
are
typically
prohibited
from
obtaining
further
financing
unless
the shared
equity
investor
approves
of
the
lender.
1
04
The
liquidated
damages
are
also
typically
high,
usually
equaling
the
total
shared
equity
investment
amount.
Further,
although
private
investors
such
as
Hometap
claim
to
be equity
investors,
they
may
also
require
the
homeowner
to
enter
into
a
mortgage
instrument.
105
The
private
market's
innovative
shared
equity
financing
products
can
seem
extremely
attractive
for
homeowners,
especially
since
homeowners
would
not
have
to
worry
about
monthly
payments
or interest
due
to
an
in-
vestor
for
the
investor's
equity
investment.
106
Homeowners
also
retain
98.
Again,
with
this
scenario
our
numbers
were
taken
from
Point's
website.
See
id.
99.
Numbers
taken
from
the
Point
website.
See
id.
100.
See
Jeff
Gitlen,
Best
Home
Equity
Sharing
Companies
to
Invest
in
Your
Home,
LENDEDU
(Mar.
1,
2022),
https://lendedu.com/blog/home-equity-sharing-agreements/
[https://perma.cc/Z7KT-8MBZ].
101.
See
Who
Is
Responsible
For
Property
Taxes,
Insurance
And
Property
Maintenance
Costs?,
POINT
(Dec.
27,
2019),
https://help.point.com/article/26-who-is-responsible-for-property-taxes-insura
nce-and-property-maintenance-costs
[https://perma.cc/E4L4-M8JT].
102.
For
simplicity's
sake,
we will
refer
to
the
resident
homeowner
as
the
homeowner
for
the
remainder
of
this Article.
103.
See
Still
Have
Questions?
We've
Got
Answers,
supra
note
54.
104.
See
Advpnced
Topics,
UNISON,
https://www.unison.com/faq/#faqAdvanced
[https://perma.cc
/R2Q8-SBP9]
(last
visited
Mar.
1,
2022).
105.
See
Everything
You
Need
to Know
About
Signing
and
Receiving
Your
Funds
from
Hometap,
HOMETAP,
https://www.hometap.com/documents/How-Signing-and-Disbursement-WorksHometap.p
df
[https://perma.cc/N2MB-4PD6]
(last
visited
Mar.
1,
2022).
106.
See
How
It
Works,
NOAH,
https://www.noah.co/how-it-works
[https://perma.cc/2TDE-KME
B]
(last
visited
Mar.
1,
2022).
486
[Vol.
61
Sharing
Your
Home
with
Strangers
legal
ownership
of
the
property,
as
the
shared
equity
financing
company
is
not
added
to
the
title.
107
Shared
equity
financing
can
also
help
homeowners
increase
the
size
of
their
down
payment,
which
would
help
minimize
any
mortgage
that
the
homeowner needs
to
cover the
rest
of
the
purchase
price.
108
Increasing
the
down
payment
lowers
monthly
payments
and
makes
it
possible
for
the
homeowner
to
access
a
better
mortgage
interest
rate.
10 9
These
lower,
more
affordable
monthly
mortgage payments
may
also,
in turn, decrease
the
chance
that
a
homeowner
defaults
on the
mortgage.
1 10
Additionally, using
shared equity
financing
funds
to
pay
a
sufficient
down
payment
could
allow
homeowners
to
avoid
paying
for
private
mortgage
insurance,
usually
required for
conventional
loans
with
low
down
payments.
1 11
Shared
equity
financing
may
also
be
more
accessible
to
potential
homebuyers
because
of
the
less
stringent qualifications required
for
finan-
cing.
Shared
equity
investors
generally
set
a
lower
bar
for credit
score or
credit
history than
other
financing
methods,
such
as
a
traditional
mort-
gage.
112
Because
the equity
investment
does
not
add
to
a
homeowner's
debt
load
or
show up on
credit reports,
1 13
shared
equity
financing
could
also
ben-
efit
potential homeowners
with
liquidity
issues.
Homeowners
may
also
be
drawn
to
the
flexibility
of
shared
equity
financing,
which
offers
two
options
for
repayment.
One
option
is
that
homeowners
can
wait until
the
end
of
the
term
to
repay
the
investor
by using
savings,
traditional debt
products,
refinancing
using
another
equity
in-
vestment,
or
proceeds from
selling
the
property.
1 1 4
Alternatively,
the
home-
owner
can
prepay by
buying
out
the
investor's
ownership
before
the
end
of
the term.
1 1 5
107.
See
id.;
see also
Advanced
Topics,
supra
note
104.
108.
Stephanie
Colestock,
What
Is a
Shared
Equity Mortgage,
LENDNGTREE
(Oct.
5,
2021),
http
s://www.lendingtree.com/home/mortgage/buying-a-home-with-a-shared-equity-mortgage/
[https://per
ma.cc/DCS2-3DN8].
109.
Id.
110.
See
id.
111.
Id.
112.
Compare
Still
Have
Questions?
We've
Got
Answers,
supra
note
54
(requiring
a
minimum
credit
score
of
580),
and
How
Do
Homeowners
Qualify
for
a
Point
Home
Equity
Investment,
POINT,
https://help.point.com/article/15-how-do-homeowners-qualify-for-point
[https://perma.cc/NQW3-K4F
2]
("Point
is
much more flexible
about
your
credit
than
conventional home
equity
options"),
with
Alexandria
White, What
Credit
Score
Is
Required
To
Buy
A
House?,
CNBC
(Dec.
22,
2020),
https://w
ww.cnbc.com/select/credit-score-needed-to-buy-house/
[https://perma.cc/B4D8-UBRU]
(stating that
the
minimum
credit
score
required
for
conventional
loans
is
620).
113.
Still Have Questions?
We've
Got
Answers,
supra
note
54.
114.
See
When
and
How
Is
Point
Paid?,
POINT
(Dec.
27,
2019),
https://help.point.com/article/18-
when-and-how-is-point-paid
[https://perma.cc/7NVZ-PSR3].
115.
See
Can
I
Repay
Point
Before
the
End
of
the Term?,
POINT
(Dec.
27, 2019),
https://help.point.
com/article/19-can-i-repay-point-before-the-end-of-the-term
[https://perma.cc/K4vW-BWAY]
("You
have the
flexibility
to
buy Point
out
at
any time during your term.").
2022]
487
Sharing
Your
Home
with
Strangers
benefits
of
home
improvement
without
compensating
homeowners
for
these
efforts.
12
1
Another
restriction
is
that
some
investors
do
not
permit
home-
owners
to
rent
the
property
to
third
parties.
12
2
Additionally,
shared
equity
financing
agreements
can
limit
home-
owners
when
they
seek mortgage
financing,
because
only
a
few
mortgage
providers
are
comfortable
working
with
a
borrower
who
is
a
party
to
a
shared
equity
agreement.
123
As
a
result,
some
of
the
shared
equity
financing
firms,
like Unison,
require
homeowners
to
work
with
designated
lenders,
limiting
their
ability
to
shop
around
for
the
best mortgage
terms.1
24
Finally,
the
lack
of
familiarity
with,
and
regulation
of,
private
shared
equity
financing
offers
borrowers
little
protection.
It
is
not
easy
to
obtain
concrete
and
detailed
information
about
these
private
shared
equity finan-
cing
companies
and
their
products.
Shared
equity
financing
could easily
tempt
homebuyers
to
buy
homes
that
are
more
expensive
than
they
can
reasonably
afford,
making
homebuyers
more
likely
to
default
if
they
have
no
equity
cushion
when
housing
prices
drop.
Shared
equity
financing
may
not
be
covered
by
the
Dodd-Frank
Act's
definition
of
"alternative
mortgage
transaction,"
nor
by the
Alternative
Mortgage
Transaction
Parity
Act's
definition
of
"alternative
mortgage
transactions."
125
The
lack
of
consumer
protections
is
reminiscent
of
a
long,
problematic
history
of
lending
to
borrowers
unaware
of
the risks
or
terms
they
agreed
to.
12 6
D.
Alternatives
to
Shared
Equity
Financing
There
are
various
alternatives
to
the
traditional
mortgage
and
the
shared
equity
financing
models
of
home
buying.
First,
there
are
a
variety
of
traditional
alternatives.
Then
there
are
government-supported
alterna-
tives.
There
are
also
more
fintech
alternatives.
And
finally,
there
are
a
variety
of
academic
proposals
that
are in
various
stages
of
development.
121.
Id.
("During
the
term
of
your
agreement
with
Unison,
you
are
required
to
maintain
your
property
in
good
condition,
subject
to
normal
wear-and-tear.
If
you
do
not,
when
the
agreement
ends
the
value
of
your
property
will
most
likely
be
less
than
it
would
have
been
if
it
had
been
properly
maintained,
and
this
would
not
be
fair
to
Unison
...
Since
the
loss
in
value
would
be
due to
your
failure
to
maintain
the
property,
the
Deferred
Maintenance
Adjustment
allocates
all
of
the
loss
in
value
due
to
improper
maintenance
to
you,
so
that
Unison
does
not
share
in
it.").
122.
Advanced
Topics,
supra
note
104.
("Typically,
Unison
only
invests
in
owner-occupied
property.").
123.
Id.
124.
Id.
125.
See
12
U.S.C.
ยง
3802(1).
126.
See
Alana
Semuels,
A
House
You
Can
Buy,
But
Never
Own,
THE
ATLANTIC
(Apr.
10,
2018),
https://www.theatlantic.com/business/archive/2018/04/rent-to-own-redlining/557588/
[https://perma.c
c/AHE6-QXZ9].
2022]
489
Washburn
Law
Journal
1.
Traditional
Mortgage
Alternatives
Traditional
mortgage
alternatives
include
installment
sales
con-
tracts,
127
contracts-for-deed,
128
and
seller financing.
129
These
alternatives
are
very
lender-friendly
and offer
little,
if
any,
protection
for
borrowers.
As
the
mortgage
market
grew,
these
alternatives
became
less
desirable
to
homebuyers
who
had
access to
the
mainstream
financial
system.1
30
Thus,
these
mortgage
alternatives
were
relegated
to
communities
with
limited
access
to
the
primary
mortgage
market-communities
of
color,
communi-
ties
with
lower-income
residents,
and
communities
with
few
affordable
housing
options.
13 1
Lenders
often
took
advantage
of
borrowers
who turned
to
these
mortgage
alternatives
and
who
did
not
understand
the
opaque
terms
of
the
agreements
they
signed.1
32
Predatory
lender
behavior
made
it
ex-
tremely
difficult
for
borrowers
to
build
and
maintain
equity.1
33
Depending
on the
agreement,
missing
just
one
payment
could
cause the
borrower
to
lose
all
the
equity
put
into
the home,
despite
fulfilling
all
the other
agreement
conditions
over
decades
(including
paying
for
home
repairs).1
34
Besides
turning
to
lenders
and
investors,
homebuyers
can
also
attain
financing
by
withdrawing
money
out
of
their
retirement
accounts,
bor-
rowing
from
family
or
friends,
or
taking
out
funds
from
any
whole
life
insurance
policies
that
they
own.
135
Each
of
these options
comes
with
its
own
risk
and
opportunity
cost
as
well.
2.
Government
Program
Alternatives
The
government
also
offers
programs
that
can
keep
down
payments
low
to
make
homeownership
more
accessible.1
36
Government
programs
are
127.
See
Sarah
Mancini
&
Margot
Saunders,
Land
Installment
Contracts:
The
Newest
Wave
of
Predatory
Home
Lending
Threatening
Communities
of
Color,
FED.
RSRV.
BANK
Bos.
(Apr.
13,
2017),
https://www.bostonfed.org/publications/communities-and-banking/2017/spring/iland-installment-cont
racts-newest-wave-of-predatory-home-lending-threatening-communities-of-color.aspx
[https://perma.c
c/8Z3Q-TDR8].
128.
Semuels,
supra
note
126.
129.
See
Kiah
Treece
&
Mike
Cetera,
Owner
Financing:
What
It
Is
and
How
It
Works,
FORBES
(Jan.
11,
2021,
9:13
AM),
https://www.forbes.com/advisor/mortgages/owner-financing/
[https://perma.
cc/8988-PMA8];
see
Julia
Kagan,
Seller
Financing
Definition,
INVESTOPEDIA
(Dec.
11,
2020),
https://w
ww.investopedia.com/terms/s/seller-financing.asp
[https://perma.cc/NEF2-L6v9].
130.
See Semuels,
supra
note
126.
131.
See
id.
132.
See
id.
133.
See
id.
134.
See
id.
135.
Dan
Rafter,
7
Alternatives
to
a
Traditional Mortgage
for
Buying
a Home,
MORTGAGELOAN,
https://www.mortgageloan.com/7-alternatives-traditional-mortgage-buying-home-9761
[https://perma.
cc/H5S5-G4YU]
(last
visited
Mar.
1,
2022).
136.
See
Mortgages,
USAGov,
https://www.usa.gov/mortgages
[https://perma.cc/923S-GUC6]
(last
visited
Mar.
1,
2022).
490
[Vol.
61
Sharing
Your
Home
with
Strangers
heavily
regulated
and
emphasize
borrower
protection,
which
significantly
reduces
the
risk
that
lenders
might take
advantage
of
borrowers.
The
federal
government
supports
homebuyers
through
Fannie
Mae,
Freddie
Mac, the
Federal
Housing
Administration,
the
U.S.
Department
of
Veterans
Affairs,
the
Department
of
Housing
and
Urban
Development,
and
more.
137
These governmental
departments
and
government-sponsored
en-
terprises
all
offer
mortgage
assistance
to
eligible
homebuyers.
13 8
State
and local
governments
also
offer
similar
programs
to
incentivize
and
help
aspiring
homeowners,
especially
first-time
homebuyers.
139
Many
of
these
programs
offer
down
payment
grants,
no-down-payment
mort-
gages,
favorable
interest
rates,
and
sometimes
even
federal
tax
breaks.
140
Some
of
these
programs
may
target
particular
geographic
areas
or
certain
professions.
141
3.
Other
Fintech
Alternatives
In
addition
to
shared
equity
financing,
fmtech
companies
have
sought
to
expand
financing
options
in
ways
other
than
these
traditional
models.
One
alternative
is
co-investing
in
a
home's
value
(e.g.,
Haus).1
42
Co-
investment
requires
the
homeowner
to
make
monthly
payments
that
increase
or
decrease
the
homeowner's
ownership
share
depending
on
the
size
of
the
payment.
14
3
Like
the
new
shared
equity
financing
products,
one
benefit
of
co-investment
is
that
homeowners
retain
title
to
the
property.144
Additionally,
under
co-investment,
no
additional
mortgage
is
needed,
and
the
homeowner
only
has
to
put
down
a
minimal
portion
of
the
purchase
price.
145
For
example,
Haus
covers
ninety
percent
of
the
purchase
price
by
paying
in
cash,
and
the
homeowner
only
needs
to
put
down
the
remaining
ten
percent.
Haus
requires
lower
monthly
payments
than
traditional
month-
137.
Paul
Esajian,
12
Homeownership
Assistance
Programs
You
Should
Know
About,
FORTUNEBUILDERS,
https://www.fortunebuilders.com/homeownership-programs/
[https://perma.cc/3
THE-RR8H]
(last
visited
Mar.
1,
2022).
138.
Id.
139.
Id.
140.
Special
Loan
Programs,
CFPB,
https://www.consumerfinance.gov/owning-a-home/loan-
options/special-loan-programs/
[https://perma.cc/FAK6-ZCDK]
(last
visited
Mar.
1,
2022);
First-Time
Home
Buyer
Programs
by
State,
NERDWALLET
(July
27,
2021),
https://www.nerdwallet.com/article/m
ortgages/first-time-home-buyer-programs-by-state
[https://perma.cc/W3MR-7ERL].
141.
Special
Loan
Programs,
supra
note
141.
142.
See
A
Smarter
Way
to
Own,
HAUS,
https://haus.com/
[[https://perma.cc/D4CQ-99J8]
(last
visited
Mar.
2,
2022).
143.
See
FAQ,
HAUS,
https://haus.com/faq
[https://perma.cc/6DC9-DDDR]
(last
visited
Mar.
2,
2022).
144.
Id.
145.
Id.
491
2022]
Washburn
Law
Journal
ly
mortgages,
and
homeowners
can
purchase
more
equity
throughout
the
term.
146
In
some
ways,
Haus's
model
is
like
shared
equity
on steroids.
Some
investors
are
also
modernizing
the
traditional
lease-to-own
model,
which
has
a
fairly
negative
track
record
for
prospective
home-
owners.
One
such
investor
is
Fleq.
Upon
establishing
a
partnership
with
a
homeowner,
it
shakes
up the
distinction
between
tenant
and
owner
by
allowing
the
homeowner
to
fill
aspects
of
both
roles
simultaneously.
147
The
Fleq
partnership
model
creates
two
roles
for
the
aspiring
homeowner
partner
to fill:
partial
owner
and
tenant.
1
4 8
As
the
"partial
owner"
the
home-
owner
has
to
pay
for
her
ownership
share
of
expenses,
such
as
taxes,
insur-
ance,
and
repairs.1
4 9
As
the
"tenant"
of
that
partnership,
the
same
home-
owner
is
obliged
to
pay
rent
to
Fleq
based
on
the
portion
of
the
home
that
she
does
not
own.
150
The
homeowner
begins
with
a
minimal
initial
equity
contribution
and
can
purchase
as
much
equity
as
she
may
want
from
Fleq.151
However,
this
flexibility
does
come
with
some
caveats.
The
property
needs
to
be
valued
every
year,
which
means
that
appraisal
costs
can
add
up
because
the
price
to
purchase
equity
depends
on
the
current
property
val-
ue.
15
2
The
financing
alternatives
described
above
are
not
exhaustive
and
could
not
possibly
cover
all
the
available
products
on
the
market,
especially
as
fintech
companies
are
constantly
creating
new
ways
of
divvying
up the
bundle
of
rights
of
real
property.
But
it
does
give a
sense
of
the
ferment
that
is
happening
in
the
traditionally
stodgy
realm
of
homeownership
at
the
beginning
of
the
twenty-first
century.
As
with
the
relatively
more
straightforward
shared
equity
financing,
these
new
models
likely
present
traps
for
the
unwary.
4.
Academic
Proposals
Scholars
have
also
proposed
a
range
of
financing
alternatives
to
increase
homeownership
accessibility
for
low
and
moderate-income
house-
holds.
For
example,
researchers
affiliated
with
the
American
Enterprise
Institute
have
created
the
Wealth
Building
Home
Loan,
which
has
been
146.
Id.
147.
See Kelsey
Ramirez,
Here's
How
to
Use
Fleq
to Buy
a
Home
Without
a
Mortgage,
HoUStNGWIRE
(Jan.
20,2020,6:01
PM),
https://www.housingwire.com/articles/heres-how-to-use-fleq-
to-buy-a-home-without-a-mortgage/
[https://perma.cc/7URE-NCSG];
see
also
Frequently
Asked
Questions,
FLEQ,
https://fleq.com/faqs/
[https://perma.cc/QE2F-7C5H]
(last
visited
Mar.
1,
2022).
148.
Ramirez,
supra
note
147;
FLEQ,
supra
note
147.
149.
Ramirez,
supra
note
147;
FLEQ,
supra
note
147.
150.
Ramirez,
supra
note
147;
FLEQ,
supra
note
147.
151.
How
It
Works,
FLEQ,
https://fleq.com/#how-it-works
[https://perma.cc/U3UY-PM5E]
(last
visited
Mar.
1,
2022).
152.
Id.
[Vol.
61
492
Sharing
Your
Home
with
Strangers
brought
to
the
market
through
a
relatively
modest
initiative.
153
This
is
a
fifteen-year
loan
with
a
low
fixed
interest
rate,
little
or
no
down
payment,
and
no
additional
fees.
154
However,
while
this
loan
has
very
attractive
terms,
it
is also
based
on
strict
underwriting
criteria,1
55
limiting
its
availa-
bility
to
potential
homebuyers.
Researchers
at
the
Board
of
Governors
of
the
Federal
Reserve
System
have
proposed
a
Fixed
Cost
of
Funds
Index
Mortgage,
which
also
offers
attractive
terms
for
homeowners.
156
This
product
effectively
credits
the
homeowner
with
any
decrease
in
interest
rates,
based
around
the
Cost
of
Funds
Index,
that
occurs
during
the
loan
term.
157
Reducing
the
amount
applied
toward
interest
increases
the
monthly
payment
portion
applied
to
repaying
the
outstanding
principal.1
58
This
allows
homeowners
to
accum-
ulate
equity
much
more
quickly,
eliminating
the
need
for
large
down
payments
and
protecting
the
investor
from
prepayment
risks.1
59
The
Urban
Institute
researchers
have
proposed
a
variety
of
housing
voucher
reforms
that
would
provide
down
payment
assistance
to
new
homeowners.
160
One
such
reform
is
a
down-payment
subsidy
targeted
at
first-time
homebuyers
under
the
voucher
program.161
These
researchers
believe
that reallocating
funds
from
rent
subsidy
programs
to the
revised
voucher
program
would
increase
homeownership
in
low-income
house-
holds.
162
Another
suggested
reform
is
to
allow
the
Low-Income
Housing
Tax
Credit
to
be
used
for
homeownership,
in
addition
to
rental
housing.
16
3
Both
of
these
proposals
focus
on
reforming
already-existing
low-income
housing
programs
to
support
homeownership,
not
just
rent
assistance.
164
153.
See
Lisa
Prevost,
A
New
Way
to
Build
Equity,
N.Y.
TIMES
(Sept.
18,
2014),
https://www.nyti
mes.com/2014/09/21/realestate/a-new-way-to-build-equity.html
[https://perma.cc/584J-KX46].
154.
See
id.
155.
See
id.
156.
Wayne
Passmore
&
Alexander
von
Hafften,
Financing
Affordable
and
Sustainable
Homeownership
with
Fixed-COFI
Mortgages
1,
4-14
(Fed.
Rsrv.
Bd.,
Working
Paper
No.
2018-009,
2018),
https://papers.ssm.com/sol3/papers.cfm?abstractid=3120333
[https://perma.cc/2VC4-ESAH].
157.
Id.
at
4-6.
158.
Id.
at
4-7.
159.
Id.
at
7-9.
160.
EDGAR
O.
OLSEN,
THE
URB.
INST.,
PROMOTING
HOMEOWNERSHIP
AMONG
LOw-INCOME
HOUSEHOLDS
1-3
(2007),
https://www.urban.org/sites/default/files/publication/46626/41
1523-Promot
ing-Homeownership-among-Low-Income-Households.PDF
[https://perma.cc/GEB8-H9CS].
161.
See
id.
at
1-3,
8-11.
162.
Id.
at
11-12.
163.
Id.
at
1-4,
12-13.
164.
See
id.;
Help
Buying
a
New Home,
USAGOv,
https://www.usa.gov/buying-home
[https://perm
a.cc/RS4F-94F8]
(last
visited
Mar. 2,
2022).
2022
]
493
Washburn
Law
Journal
5.
Alternatives
for
Current
Homeowners
Current
homeowners
seeking
to
access
the
equity
in
their
homes
can
rely
on
various
traditional
products.
1
65
These
products
offer
many
of
the
same
benefits
as
shared
equity
financing,
depending
on
the
profiles
of
the
homeowners
and
the
companies
they
seek
to
do
business
with.
Like
many
of
the
aforementioned
fintech
products,
Home
Equity
Lines
of
Credit
("HELOCs")
also
offer
the
benefit
of
disbursing
funds
on
an
as-needed
basis,
up
to
a
pre-approved
credit
limit,
and
interest
may
be
tax
deductible
if
the
funds
were
spent
for
qualified
purposes.
166
Repayment
comes
in
the
form
of
monthly
payments
based
on
the
amount
borrowed
and
the
current
interest
rate.
16
7
Reverse
mortgages,
on
the
other
hand,
typically
disburse
funds
monthly,
but
funds
could
also
be
disbursed
in
a
line
of
credit,
lump-
sum
payment,
or
combination
of
these
three
methods.
16
8
No
payment
of
principal
or
interest
is
required
until
the
entire
loan
becomes
due.
1
69
Fintech
companies
have
also
sought
to
expand
options
for
current
homeowners.
Homeowners
can
tap
into
their
home's
equity
through
a
residential
sale-leaseback
(e.g.,
EasyKnock).
170
Under
this
arrangement,
homeowners
sell
their
house
and
lease
it
back
as
a
tenant.
1
7 1
This
gives
homeowners
quick
cash
because
they
can
sell
the
house
immediately,
and
it
can
be
helpful
when
homeowners
find
it
difficult
to
obtain
a
new
mort-
gage.
Some
programs
of
this
sort
also
allow
the
homeowner-turned-tenant
to
repurchase
the
house.
17 2
However,
it
is
important
to
note
that
this
is
not
a
homeownership
product
because
the
homeowner
sold
the
home,
so
the
former
homeowner
no
longer
owns
it.
Homeowners
can
also
use
a
trade-in
to
unlock
the
current
home's
equity
with
an
"Equity
Advance
Loan"
before
selling
the
home.
Investors,
such
as
Knock,
purchase
new
homes
on
behalf
of
homeowners
and
then
qualify
the
homeowner
for
an
interest-free
bridge-like
loan
from
the
homeowner's
remaining
equity
in
the
old
home.
This
"Equity
Advance
Loan"
effectively
unlocks
the
homeowners'
equity
in
the
old
house
before
165.
The
authors
consider
traditional
products
to
include
home
equity
loans,
Home
Equity
Lines
of
Credit
("HELOCs"),
and
reverse
mortgages.
166.
See
Home
Equity
Loans
and
Home
Equity
Lines
of
Credit,
FTC
(Dec.
2021)
https://www.cons
umer.ftc.gov/articies/home-equity-loans-and-home-equity-lines-credit
[https://perma.cc/U9D5-MD
SS].
167.
Id.;
Daniel
Kurt,
A
Guide
for
Home
Equity
Loans
and
HELOCs,
INVESTOPEDIA
(Sept.
11,
2021),
https://www.investopedia.com/mortgage/heloc/
[https://perma.cc/ELN5-JRDQ].
168.
See
Reverse
Mortgages,
FTC
(June
2015),
https://www.consumer.ftc.gov/articles/0192-revers
e-mortgages
[https://perma.cc/Y43Z-NHBH].
169.
Id.
170.
See
Frequently
Asked
Questions,
EASYKNOCK,
https://www.easyknock.com/faqs
[https://per
ma.cc/8EN5-HCWL]
(last
visited
Mar.
1,
2022).
171.
See
id.
172.
See
id.
[Vol.
61
494
Sharing
Your
Home
with
Strangers
sale.1
73
This
helps
homeowners
avoid
paying
two
mortgages
for both
the
old and new home
before
the
old
home
sells.
However,
this
product
only
unlocks
equity
for
the
sole
purpose
of
switching
homes.1
74
E.
More
Regulation
Ahead?
In
the
early
2000s,
homeowners
were offered
"easy"
money
on
opaque
terms.
17 5
That
scenario
did not
end
well
once
the financial crisis
hit,
and
a
lot
of
the
easy
money
was
anything
but
once
homeowners
began
to
de-
fault.176
Homeowners
who
are
attracted
to
shared
equity
financing
agree-
ments
and similar
fintech
innovations
may
find themselves
regretting
the
"easy"
money
once
they
see
how
the
numbers
can
work
against
them.
Private
companies
have
generally
crafted many
protections
for
them-
selves, and
consumers
are
left
to
fend for
themselves.
The
private sector
has
historically
created
mortgage
alternatives
that
benefit
investors
more
than
homeowners. While
private
shared
equity
financing
schemes
are
rela-
tively
new,
it
would
be
unsurprising
to see
consumer
protection
issues arise.
This
will
be
particularly
likely
as
homeowners begin
to face
large
payments
to
investors
once the
terms
of
the
financing
agreements
expire.
The
Federal
Housing
Administration
had
become
concerned
that
shared
equity
mortgages
were
a
source
of
abuse
when
it
eliminated
such
mortgages
from
its
roster
of
products
in
1988.177
Because
of
the
lack
of
familiarity
with novel shared
equity financing
and
all the
risks
that
come
along
with
it,
it
can
be expected
that
state and federal
regulators
will
take
a
close
look
at
shared
equity
financing
and
other
fmtech
innovations before
their
market
share
grows much
further.
The
Consumer
Financial
Protection
Bureau
might
also
question
whether
these
innovative
products
help
con-
sumers
in
the
financial marketplace.
Additionally,
State
Attorneys
General
might
wonder whether
such
financing
options
belong
in
a
fair
marketplace.
And
courts
might
question
whether
some
of
them
should be
viewed
as
equitable
mortgages
under
the
common
law and
therefore
afford home-
owners with
the
same
protections
afforded
to
mortgagors.
173.
See
Simple
and
Certain
Solutions,
KNOCK,
https://www.knock.com
[https://perma.cc/T7V8-
6J65]
(last
visited
Mar.
1,
2022).
174.
See
Frequently
Asked
Questions,
KNOCK,
https://www.knock.com/faq
[https://perma.cc/N8H
A-CS3H]
(last
visited
Mar.
1,
2022).
175.
See
MARTIN
NEIL
BAILY, ROBERT
E.
LITAN
&
MATTHEW
S.
JOHNSON,
THE
ORIGINS
OF
THE
FINANCIAL
CRISIS
7, 8,
27,
33, 45
(2008),
https://www.brookings.edu/wp-content/uploads/2016/06/11_
originscrisisbailylitan.pdf
[https://perma.cc/V7WC-TNRL].
176.
See
id.
at
18,
21.
177.
See
MYRON
C.
WEINSTEIN,
29
NEW
JERSEY
PRACTICE:
LAW
OF
MORTGAGES
ยง
3.10 (2021).
2022]
495
496
Washburn
Law
Journal
[Vol.
61
The
bottom
line
is
that
today's
homebuyers
interested
in
shared
equity
financing
and
similar
innovative
products
should
fully
understand
the
terms
of
the
agreement
before
signing
on
the
dotted
line.
V.
CONCLUSION
We
tend
to
think
that
the
only
way
to
do
homeownership
is
the
way
that
we
have
been
doing
it
during
our
lifetime
and
that
of
our
parents.
But
the
way
that
homeownership
can
express
itself
can
change
and
is
changing.
The
new
models
described
above
show
some
promise
and
some
perils
for
coming
generations
of
homeowners.
Some
of
the
models
have
the
potential
to
create
more
affordable
housing.
Others,
however,
present
risks
to
the
unwary
and
should
be
vetted
carefully
before
they
are
adopted
on
a
wide
scale.