The U.S. housing market is at a turning point. For many people—especially first-time buyers, low- to moderate-income (LMI) households, and communities of color—traditional lending and subsidy models are proving insufficient. But by adopting shared equity, shared appreciation, and shared risk models, credit unions have an opportunity to create structural change that leads to a more inclusive, sustainable housing market.
These models represent a fundamental shift in how wealth, risk, and opportunity are distributed and underscore a collaborative approach to solving complex, long-standing community challenges. And while they’ve shown promise at the local level, they won’t move the needle unless the industry—including credit unions—embraces them at scale.
Redefining Ownership Through Shared Equity
Shared equity challenges the idea that homeownership is constituted by owning both the housing structure and the land on which it is built.
A community land trust (CLT), the most common example, keeps land ownership in the hands of a nonprofit or public entity so the homeowner leases the ground and buys only the house, which reduces the initial purchase price, and therefore, the down payment. Resale restrictions on the ground lease limit the price at which the house can be sold, preserving affordability for the next buyer, too. The initial subsidization of the land supports multiple families over time, creating a cycle of affordability.
In a limited equity cooperative, another shared equity model, rather than purchasing a whole house or multifamily unit, residents purchase shares in a cooperative at a below-market price and agree to resell their shares at a price that ensures long-term affordability.
Deed-restricted homeownership is another example where a home may be purchased at a below-market price with the caveat that any subsequent sale of the home is limited to income-eligible members at an affordable price.
All of these options ensure affordability for future buyers while allowing current owners to build equity.
Unlocking More with Shared Appreciation
Shared appreciation mortgage loans offer another way to increase and maintain affordability, particularly in high-cost or rapidly appreciating markets. These are often structured as silent second mortgages: for example, a member might receive down payment assistance with no monthly payments, repaying the loan plus a share of appreciation upon sale or refinance. There are many additional innovative ways to structure a shared appreciation mortgage, which gives credit unions and their members flexibility in how they share the gain.
This model stretches limited public or philanthropic dollars further. Instead of a grant that helps one household, the investment is recycled for future buyers. For credit unions and agencies, it also offers risk mitigation—expanding access without sacrificing stability. In cities where the affordability gap exceeds $100,000, shared appreciation is essential.
The Case for Shared Risk
Shared risk is less clearly defined than shared equity models or shared appreciation mortgages but just as vital. It reframes the core question in housing finance from: “What can we gain?” to “What can we build together?” In traditional mortgage lending, credit unions and members shoulder nearly all the financial risk. However, shared risk models ask whether that responsibility could be distributed more broadly—across financial institutions, mission-driven investors, housing developers, and community stakeholders.
This concept is beginning to take shape. Some lenders pilot pooled-risk programs, where multiple institutions fund affordable lending initiatives and share the outcomes. Others are exploring insurance-backed guarantees or public-private co-investment models that reduce individual exposure. While these approaches differ, they share a common goal: fostering more inclusive lending by reducing the downside for any one party.
Scaling What Works
The biggest hurdle isn’t proving these models work—it’s scaling them. Most shared equity and appreciation programs are hyperlocal and dependent on city politics, nonprofit infrastructure, and public funding. However, regional collaboration is possible, and industry leaders are beginning to explore how. The Mortgage Bankers Association’s CONVERGENCE initiative is one example, helping stakeholders identify practices that can be adapted and replicated.
Credit unions, in particular, have a role to play. By participating in shared risk programs or funding community-driven efforts, they can unlock long-term opportunities in underserved markets. Developers and municipalities can contribute land or zoning support. Housing nonprofits can also serve as the connective tissue between stakeholders.
It’s Time for Credit Unions to Lead
This moment demands more than incremental change. It calls for a mindset shift, one that views homeownership not only as a wealth-building tool but also as a shared endeavor that requires shared solutions.
We know these models work. The question is whether the industry is ready to champion them. Shared equity, shared appreciation, and shared risk are not fringe ideas. They are essential strategies for a housing system that includes everyone.
If your credit union is ready to explore how to implement these models, iEmergent can help. Our data and analytics show where affordability gaps are greatest, where shared equity, shared appreciation and shared risk programs can have the most impact, and how to design lending strategies that balance opportunity with stability. Let’s work together to turn these ideas into action for your members. Contact iEmergent today.