SEP-FAQ

Shared equity homeownership is a way to make homeownership affordable by reducing the purchase price of a home. In exchange, the homeowner agrees to limit how much profit they can make when they sell the home. Through this system, the home continues to stay affordable for all future buyers. Once a home enters the shared equity program, it stays in the program in perpetuity. 

In traditional homeownership, you keep all of the increase in the home’s value—the appreciation—when you sell. With shared equity homeownership, 25% of the appreciation stays with you upon the sale of the home, and 75% remains with home, ensuring the home remains affordable for future generations of buyers.

Shared equity helps address the gap between what homes cost and what people can afford, especially in places like Vermont where construction costs are high and affordable housing inventories are limited.  
At the end of the day, it allows public and philanthropic investments to create long-term affordability for generations of Vermonters who want to live and work in the Green Mountain State.

Eligibility is typically based on income. Eligibility is determined by looking at your household income compared to the Area Median Income (AMI) of the county in which you are looking to purchase the shared equity home. Downstreet can help you determine your eligibility at the link: https://downstreet.org/home-buyer-education.

The home is purchased for a below-market price made possible through generous public funding. Homebuyers are still responsible for obtaining their own mortgage and financing. Any principle paid to your mortgage comes back to you at the time of sale.

Yes. Shared-equity homeowners build equity through two methods:

• Paying down their mortgage principle
• Receiving 25% of the home’s appreciation when they sell

There are no guarantees that the home you purchase will go up in value. While homeowners receive 25% of any increase in the value of their home, they are responsible for 100% of any decrease in property value. This is the only way in which the shared equity program can maintain the affordability of the home for future homeowners.

When the home is being sold, the homeowner first reaches out to Downstreet to let our team know about their intent to sell. The Downstreet team will help with the entire process, and the homeowner will not incur any real estate costs. When it’s time to sell:

• The resale price is determined by a formula in the housing subsidy covenant
• The homeowner receives their initial investment plus 25% of the appreciation
• The home is then sold to another income-qualified buyer at an affordable price

Buyers are encouraged to start with homes already in the portfolio, as they already have funding attached to the home. However, some years, Downstreet receives subsidies to provide eligible buyers with down-payment assistance to buy a Downstreet-approved home on the open market. Downstreet can help you learn more about what funding is available at any given time.  

Yes! The home belongs to the homeowner, allowing for renovations and updates. It’s important to note that significant capital improvements—such as constructing a home addition, building a garage, or other large-scale, value-increasing projects—will typically need approval to ensure the house remains affordable for future buyers. The Downstreet team can help if questions about home improvement arise.

Shared equity is a stable, lower-risk path to homeownership, rather than a way to maximize profit. It allows households to:

• Build assets
• Gain housing stability
• Avoid rising rents because of the fixed-rate nature of shared equity homeownership
• Participate in the benefits of homeownership

Shared equity can be an especially advantageous option for first-time homebuyers who are looking to gain experience in homeownership. Downstreet’s team guides buyers through the entire homebuying process. Plus, the Downstreet team is available for additional advice and support for the duration of your homeownership. 

Homeowners can refinance as long as the home remains affordable. Homeowners must speak to Downstreet first to start the refinancing process. 

Homeowners can take out equity as long as the amount does not exceed the 25% of the appreciation you’re expected to make at time of sale. Check in with Downstreet before starting this process.

Downstreet stewards the shared equity agreement and works to ensure that the home remains affordable for future buyers.

You can sell at any time! In fact, Downstreet will help you sell—you won’t even need to pay a relator. We will help you market your home and help you find the next income eligible buyer.

No. Shared equity homeowners:

• Own their home
• Build equity
• Have control over their living space

The difference between shared equity homeownership and traditional homeownership is that the homeowner agrees to maintain the affordability of the home and keep 25% of the appreciation upon time of sale.

You must be the primary owner/occupant of the home. In Vermont, homes must be owner-occupied six months out of the year for you to be considered the primary owner. Roommates are allowed in a shared equity home. Building accessory dwelling units (ADUs) on the property of a shared equity home is unfortunately not allowed.

It is generally discouraged, as shared equity homes are not allowed to be income-generating properties due to their regulations.

Without shared equity, subsidies typically benefit only one household. Shared equity ensures that the same public investment helps multiple generations of homeowners, making the home permanently affordable.

Yes, however, shared-equity homeowners get a 20-30% reduction on the municipal portion of your property taxes.

Preserves long-term affordability

• Supports a stable local workforce
• Helps families stay in their communities
• Protects public investment over time

Additionally, shared equity homes do not negatively impact the real estate market in any neighborhood or town.