The program
How the Earned Equity Program works
Seven steps, from the day you start looking to the day your name goes on the deed.
The short version
You find a house on the open market and negotiate the price like any buyer. Instead of you getting a mortgage, Tule River Homebuyer Earned Equity Agency buys the home using an FHA-insured loan and signs a homeownership agreement with you.
You move in. You make one monthly payment, calculated on a 40-year amortization schedule. The price of the home is locked at what you agreed to on day one. When you can qualify on your own, you take title.
Who holds what
The agency holds
- The FHA note. It is the borrower
- Fee simple title, your name is not on the deed
- The hazard policy, as named insured
You hold
- Possession of the home
- An equitable interest in the property
- The price, locked on day one
- The appreciation, if you complete it
Assume the FHA loan, refinance, or pay off the price
↓ Title moves to you
Step by step
You get approved for the program
A financial application and a credit report. The agency evaluates whether you can carry the payment and the ongoing costs of owning. The published standard is a 580 score with 12 months of documented housing history.
You shop for a home like any other buyer
There is no inventory to pick from. You work with an agent, you tour homes, you write an offer, you negotiate. The home has to be 1 to 2 units, your primary residence, and meet FHA condition standards.
Your contract gets assigned to the agency
You and the seller sign an addendum assigning the purchase agreement to TRHEEA. Your earnest money transfers with it. For the seller almost nothing changes: same price, same terms, cash at closing.
The agency buys the home
TRHEEA purchases using an FHA 203(b) first mortgage, a soft second of 1% that carries no payment and no interest, and the money you bring to closing. The agency is the borrower on that loan, not you. That is the whole mechanism.
You sign the agreement and move in
You get possession, an equitable interest in the property, and the right to use it as a homeowner would. Before you sign you receive a Homebuyer Cost Disclosure created by Arrive Home, which lays out your payment and your cash to close.
You pay monthly for as long as you need
One payment covering principal, interest, mortgage insurance, property taxes, homeowners insurance, HOA dues if any, and a monthly program administration fee. Payments start the month after closing and go to the master servicer.
You take title
Three ways out, any time: assume the FHA loan from the agency, refinance into your own loan, or pay off the option or purchase price. The price was locked on day one, so if the home went up in value, that increase is yours.
Straight from the source
The Guidelines say it plainly: "The Earned Equity program does not accord legal title; the Homebuyer acquires legal title through assuming the FHA Loan, refinancing, or paying off the option or purchase price." They also say there is "no shared appreciation or shared equity once the underlying option or purchase price is paid."
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Every application goes through a licensed loan originator.