What Is a Shared Appreciation Mortgage?

The American Dream doesn’t dim easily. While mortgage interest rates may be at a 20-year high and home prices remain elevated, those looking to become homeowners continue mining for alternative methods of financing. At the same time, existing homeowners who may be struggling to make monthly payments are doing the same. In some cases, a shared appreciation mortgage (SAM) could be a solution. It’s true this is not a common option, but for those who find a lender or a housing assistance program offering a SAM, it can be like hitting homeownership pay dirt. Find an Agent to Help You Buy Your First Home A top agent who knows your housing market can help you identify and navigate local and national down payment assistance and loan programs. HomeLight can connect you with an experienced buyer’s agent who will walk you through the process of buying your first home. Get Started Editor’s note: This post is meant for educational purposes, not financial advice. If you need assistance navigating a shared appreciation mortgage, HomeLight always encourages you to contact your own financial advisor.What is a shared appreciation mortgage, or SAM? A shared appreciation mortgage (SAM) is a type of loan where the borrower or purchaser agrees to share a portion of the future increase in the home’s value with the lender. In exchange, the lender offers to give the borrower a lower interest rate, lower down payment, or another form of financial assistance. This arrangement can make homeownership more affordable by reducing monthly payments or the amount of upfront money the borrower would normally need.