The program
What you are giving up
Most programs bury this section. We put it in the navigation.
Your name is not on the deed on day one
The agency holds fee simple title until you assume the loan, refinance, or pay the agreement in full. You hold an equitable interest with the right to use the home as a reasonable homeowner would. That is real, and it is not the same as being on the deed.
The risks, plainly
If you do not complete the agreement, you can lose what you put in
If you choose not to exercise the purchase option, or you cannot pay the agreement in full, you may forfeit the payments and purchase credits you have accumulated. That is the whole risk in one sentence.
Missing payments can cost you the home
Default under the agreement can end your purchase option. You have cure periods, but you do not have the foreclosure timeline a traditional homeowner has.
It costs more than a mortgage
A margin on the rate, plus a monthly program fee, plus 0.5% of the purchase price up front. Over a long horizon that is real money. The trade is access: a house now instead of a house maybe later.
A 40-year amortization builds equity slowly
In the early years most of your payment is interest. Your equity comes mainly from appreciation and from your upfront contribution, not from paying down principal.
There is no guarantee homes go up
The locked price protects you when values rise. If values fall, that same locked price works against you.
You are on the hook for repairs
You sign an attestation that you will repair minor defects within twelve months after closing, and you carry every ongoing cost of the property.
What we could not verify
Some things get repeated about this program that we could not confirm in the source documents: exactly what happens at the end of the 40-year term if a balance remains, how unused seller credits are handled after closing, and whether the mortgage interest and property tax deductions pass through to you. We are not going to state those as fact until we can cite them.
Read the Homeownership Agreement. Hire your own attorney to read it with you. If someone discourages you from doing that, walk away from them.
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Every application goes through a licensed loan originator.