Affordable Homeownership: An Evaluation of the Near-Term Effects of Shared Equity Programs

Abstract

We estimate the effect of nine shared equity programs on the short-term financial health and loan performance outcomes of participating households. Using both difference-in-difference and propensity score matching approaches, we compare the outcomes of shared equity home purchasers with the outcomes of other similar first-time home buyers in their metropolitan regions. We find that shared equity purchasers have, on average, significantly less mortgage debt and pay less on their credit accounts each month than other similar purchasers, and they are appreciably less likely to have a home equity line of credit. They also perform just as well on their mortgages as nonshared equity purchasers do, as defined by having any 90- to 180-day mortgage delinquencies. Finally, shared equity purchasers do not show appreciable differences in nonmortgage financial health measures compared with similar borrowers.