How Our Program Works

In order to not adversely affect the value of other homes in the communities in which we build, we can’t just sell our homes at lower than market prices. How then, do we achieve affordable housing?

We gift our home buyers equity through what is known as a silent second mortgage, allowing us to ‘sell’ the house at the market rate appraised value, and cover the difference for our homebuyers through our donations and fundraising effort.

Our buyers purchase their home from us and over the course of 10 years we gift them back equity in their home until they gain back full equity. We want our home buyers to only spend 30% of their income on housing, so their income is what helps us determine the price of the home. We calculate the final home price based on the expected household income, taking total gross income from the previous year (verified through tax returns).

Once we verify income, we calculate the sale price, and the residual equity that the buyer will gain from the silent second mortgage.

An example of our silent second mortgage and gifted equity would be:

Appraised Home Value: $285,000
Silent Second Mortgage Gifted By Jubilee: $60,000
Homeowner Loan Amount: $225,000

The silent second mortgage is going to be the difference between the appraised value and the purchase price. The amount is going to be what is paid over the course of 10 years until the buyer has complete equity in the property.

In this case, the $60,000 would be the total amount of the silent second mortgage, with $6,000 gifted to the buyer in equity each year that they stay in the home (this keeps buyers from flipping the home and ensures our homes are going to the Missing Middle). After the 10th year, the buyer will have gained complete equity in the property and will no longer have a silent second mortgage.

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