U.S. Reps. Blake Moore (R-UT) and Andy Barr (R-KY) on March 26 introduced a bipartisan bill that would incentivize investment in shared appreciation mortgages for new homebuyers.
“For many Americans, owning a home has long been the most reliable path to building wealth and providing stability for the family. Unfortunately, the American dream is becoming increasingly more difficult to achieve,” Rep. Moore said. “Housing affordability is a top concern for Utahns who are often priced out due to rising costs and interest rates. We live in a young state with young families who are eager to put down roots and purchase their first home, and this legislation will help them do that.”
The Shared Home Appreciation for Residential Equity (SHARE) Act, H.R. 8116, which Rep. Moore sponsored alongside cosponsors Rep. Barr and U.S. Rep. Jimmy Panetta (D-CA), would encourage private capital to invest in shared appreciation mortgages (SAMs) by making the returns attributed to these pools tax-exempt.
This would be limited to investments in SAMs used for down payment assistance for families making less than 140 percent of the Area Median Income, and would not accrue interest or require monthly payments, according to a bill summary provided by the lawmakers.
A SAM is a type of home loan where the borrower agrees to give the lender a portion of the future appreciation of the home’s value in lieu of a set interest rate. They are used in down payment assistance programs sponsored by states, municipalities, and non-profit organizations.
“The SHARE Act… [would] open new pathways to ownership through private investment while safeguarding borrowers every step of the way,” Rep. Barr said.
“This is about making sure we’re looking out for Americans and Kentuckians alike and giving more families the opportunity to put down roots and build lasting stability,” he added. “I’m proud to cosponsor the SHARE Act because it delivers real solutions for Americans.”
Under H.R. 8116, lenders would only be eligible for the tax exemption if the shared appreciation mortgage does not accrue interest and has no monthly payment obligation; does not impose a repayment percentage that exceeds the percentage of the home value borrowed; and does not exceed 49 percent of the property purchase price, among other stipulations.
“As families struggle with sky-high housing costs, we must expand access to mortgages on terms that give people the opportunities to fulfill their dreams,” Rep. Panetta said.
Homium and the Sorenson Impact Foundation support the measure.