Equity Share Agreement

Category:
State:
Multi-State
Control #:
US-02511BG
Format:
Word
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Description

In equity sharing both parties benefit from the relationship. Equity sharing, also known as housing equity partnership (HEP), gives a person the opportunity to purchase a home even if he cannot afford a mortgage on the whole of the current value. Often the remaining share is held by the house builder, property owner or a housing association. Both parties receive tax benefits. Another advantage is the return on investment for the investor, while for the occupier a home becomes readily available even when funds are insufficient.
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FAQ

A shared equity agreement enables a home buyer or homeowner to share home equity in exchange for a one-time cash payment from an investor. Such agreements allow you to liquidate part of your equity for cash or a down payment. The homeowner doesn't pay off the investor with monthly payments or interest.

A shared equity mortgage is an arrangement under which a lender and a borrower share ownership of a property. The borrower must occupy the property. When the property sells, the allocation of equity goes to each party according to their equity contribution. Each party also shares losses on the sold property.

Equity sharing sounds like a simple form of shared ownership. Investor and occupier each contribute to the down payment, occupier lives in the home, keeps it up, and makes the monthly payments, and the parties share the home appreciation.

Help to Buy is a government backed scheme, and the Help to Buy equity loan enables purchasers to buy a new build home with the help of an equity loan, also known as shared equity.

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Equity Share Agreement