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Cityscape: Volume 22 Number 1 | Housing Tenure and Financial Security


The goal of Cityscape is to bring high-quality original research on housing and community development issues to scholars, government officials, and practitioners. Cityscape is open to all relevant disciplines, including architecture, consumer research, demography, economics, engineering, ethnography, finance, geography, law, planning, political science, public policy, regional science, sociology, statistics, and urban studies.

Cityscape is published three times a year by the Office of Policy Development and Research (PD&R) of the U.S. Department of Housing and Urban Development.

Housing Tenure and Financial Security

Volume 22 Number 1

Mark D. Shroder

Michelle P. Matuga

The Potential for Shared Equity and Other Forms of Downpayment Assistance to Expand Access to Homeownership

Kristin L. Perkins
Georgetown University

Shannon M. Rieger
New York University

Jonathan Spader
U.S. Census Bureau

Christopher Herbert
Harvard University

The views expressed in this article are those of the authors and do not necessarily reflect the views of the U.S. Census Bureau. Jonathan Spader’s contributions to this article were conducted at the Joint Center for Housing Studies prior to his current employment at the U.S. Census Bureau.

Previous studies of the financial constraints for homeownership attainment have found that cash grants to cover downpayments and closing costs can substantially increase the share of renters who can afford to buy a home. Shared equity homeownership is an alternative to traditional homeownership (and renting) that provides a substantial upfront reduction in the purchase price of the home, which reduces the cost of homeownership and can expand access for households that do not have the savings for a downpayment or have incomes too low to qualify for market rate mortgages. Despite the interest in shared equity, there has been relatively modest growth in the number of these housing units, with fewer than 250,000 of them nationally. If the financial, administrative, and political barriers to shared equity programs could be overcome, how many households could potentially benefit from this alternative to renting and owning? We use household-level income, assets, and debt data from the Survey of Income and Program Participation (SIPP) to expand on previous literature by assessing how a broader range of upfront financial assistance would affect the ability of potential homeowners to buy modestly priced homes, providing estimates of the potential scale of programs providing modest downpayments as well as more substantial amounts of assistance consistent with the levels typically provided by shared equity programs. We find that 6.6 million potential homeowners could purchase a home in their county with assistance of $25,000 to $100,000, a level consistent with what shared equity programs typically provide. An additional 8.6 million potential homeowners would be able to purchase with financial assistance of $100,000 or more. Still an equal number (15.2 million) of potential homeowners would be able to buy with relatively modest assistance of $10,500 or less—amounts typically provided by traditional downpayment assistance programs. We disaggregate our results by racial/ethnic group, income, and geography and show that there may be much greater demand for shared equity than can be met by current programs.

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