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Shared Appreciation Mortgage Definition and Lender Options

You’re in the market to buy your dream home, but you’re not sure how you’ll pay for it. If only you could find a lender that would charge you just a little bit less in interest or help with the down payment, you would be able to afford the place you love.

Something called a shared appreciation mortgage (SAM) might just give you that small bit of savings you need to close on that house. 

Shared appreciation mortgages offer lower interest rates or other mortgage assistance in exchange for a portion of your home’s appreciation when you sell.  This guide will explain what they are, how they work, and where to find a SAM loan.

In this guide:

What is a shared appreciation mortgage (SAM)?

Also known as a shared equity mortgage or a shared ownership mortgage, this is a type of mortgage loan in which lenders give you a lower interest rate, lower down payment, or another form of assistance in exchange for an agreed-upon percentage your home’s future value. 

Note that a shared appreciation mortgage is not the same as a home equity sharing agreement. A home equity sharing agreement is more like a home equity loan, because you take it out after you purchase your home and already have some equity. 

Often, SAM loans are given out by municipal governments as a way to help low-income or first-time home buyers afford a home. They’re more common in cities known for expensive real estate, such as San Francisco and New York.  

Shared appreciation loans vs. traditional mortgages

A shared appreciation mortgage is similar to a traditional home loan in most ways—except the agreement to give the lender a portion of your home’s appreciated value. 

You might benefit from a shared appreciation mortgage loan if you are struggling to qualify for a home loan or you need lower monthly payments. A SAM loan allows you to share the potential risks and rewards of homeownership with your lender in exchange for a more affordable loan.

Another thing that makes a SAM loan unlike a traditional mortgage is that it’s often offered by municipal governments, so the application process will look different and you might need to demonstrate financial need. 

Some governments open applications at a specific time every year and hold a lottery, so this type of financing can be less flexible, and planning ahead and understanding what’s necessary to apply is important.

SAM loan example

For example, let’s say you need a $500,000 mortgage, but you can’t afford the necessary down payment and monthly cost of a conventional loan. You might be able to get a lower rate and down payment assistance in return for 10% of any increase in your home’s value at the time you sell it. 

So, if you were to sell your home five years later for $550,000, your lender would be entitled to 10% of that additional $50,000, or $5,000. If your home does not go up in value, your lender doesn’t get any additional money. 

This is unlike a traditional mortgage, as when you sell, you keep the value of any appreciation in equity to yourself. 

Pros & cons of SAM loans


  • You could get a lower interest rate on your mortgage.

  • It could reduce your monthly mortgage payment.

  • It could reduce or cover your down payment.

  • If your home does not appreciate in value or you don’t plan on staying in your home long, you could end up ahead. 

  • It could help you if you’re struggling to repay your mortgage. 


  • They are hard to find and not available everywhere.

  • You won’t get to keep your home’s appreciated value to yourself when you sell.

  • If you shop around, you might be able to get similar benefits from another lender without giving up a portion of your home’s appreciation.

  • You might not qualify.

  • They are less flexible due to application dates. 

Where to find shared appreciation mortgage lenders

Unfortunately, shared appreciation mortgage lenders are few and far between. Many traditional and online lenders don’t offer them. 

This type of loan would require more paperwork and consideration by a lender to make sure that it’s a good investment. Because SAM loans are particularly attractive to people who are struggling to afford a home, the added paperwork may not seem worthwhile. 

However, SAM loans may be available from local government agencies in pricy housing markets, such as San Francisco or New York City. Sometimes they are offered directly from the government, and sometimes they are offered by government agencies in partnership with a private lender. 

Here are a few examples of shared appreciation mortgage loans to get you started:

San Francisco, California

San Francisco’s down payment assistance loan offers first-time home buyers who have a low or middle income a loan of up to $375,000 toward a down payment. The loan is offered through the Mayor’s Office of Housing and Community Development and is so popular it is given out through a lottery. 

The loan must be used as a down payment on a primary residence and requires no monthly payments for up to 30 years or until the property is sold. The borrower then owes the lender a percentage of appreciation equal to the percentage of the purchase price that the loan covered. 

For example, if the house was worth $100,000 and the borrower got $10,000 from the city, the city would be entitled to 10% of any future appreciation.

Boulder, Colorado

Boulder, Colorado offers  borrowers up to $50,000 to put toward a down payment. The funds need to be repaid in either 15 years or when the home is sold. The homeowner owes the city the amount borrowed plus the percentage of the purchase price that the loan originally covered. 

The loan can cover up to 15% of the purchase price so long as it’s below $50,000.

Arlington, Virginia

The Arlington County Moderate Income Purchase Assistance Program offers first-time home buyers up to $112,500 toward a down payment. 

Buyers make no interest payments or monthly loan payments. Instead, you pay the loan off when you sell your home plus a share of the appreciation.

New York, New York

Lenders in New York are permitted to offer a shared appreciation mortgage modification to homeowners whose mortgage debt exceeds the value of their home. 

The modification would reduce the principal balance of the mortgage in exchange for up to 50% shared appreciation. This could be another option if a reverse mortgage or a mortgage refinance loan aren’t right for you.

Private lenders

There are also some lenders that offer SAM loans directly to customers. For example, Unison offers a shared appreciation loan that splits the down payment with you. When you sell, you’ll repay the loan, plus 35% of the home’s appreciation. 

You can learn more in our Unison review.

How to find a shared appreciation mortgage in your area

If you’re looking for a shared appreciation mortgage, your first step should be contacting your city to see whether it offers them. If not, someone there may be aware of programs offered by local lenders or nonprofits.

Alternatives to shared appreciation mortgages

If you’re having trouble affording a home and you can’t find a shared appreciation mortgage or don’t think that’s right for you, look into first-time home buyer programs. Government-backed loans, such as an FHA loan, might be a fit for you. 

These mortgage and down payment assistance programs may help you buy a home and retain full equity in your property.

While a shared appreciation mortgage can help you afford a property, you will be giving up a significant amount of your investment when you sell, and that might not be worth it in the end.

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