Shared Appreciation
At time of repayment, the entire loan balance plus shared appreciation must be paid to the City in full. The shared appreciation percentage and amount is determined at the time of the purchase and is based on the ratio of the FTHB loan amount to the home's purchase price.
A shared appreciation loan is a loan in which the lender receives a percentage of the home’s future increase in value. The City of Concord provides FTHB loans with zero interest and no annual payments due for the term of the loan in exchange for a share of the home’s appreciation in value. Below is an example of how the shared appreciation portion owed to the City is calculated.
If a $45,000 FTHB loan was provided to purchase a $450,000 home, the shared appreciation portion would be 10% of home’s increase in value at the time loan needs to be repaid. The 10% shared appreciation is calculated by dividing the $45,000 FTHB loan amount by the $450,000 purchase price, which equals 10%.
The FTHB Program participant will be required to pay back 10% of the shared appreciation plus the original loan amount of $45,000. If the value of the home is $600,000 at the time the City’s FTHB loan is repaid, then the shared appreciation portion of the repayment would be $15,000. $15,000 equals 10% of the $150,000 increase in value from $450,000 to $600,000. The total amount owed to the City is $60,000 ($45,000 FTHB loan plus $15,000 shared appreciation).
Click here to view a PDF of these calculations.
Concord First Time Home Buyer Program
Loan Information
Loan Repayment
The FTHB loan will not require payments during its fifteen-year term. The entire loan balance plus shared appreciation must be paid to the City in one lump sum at any time prior to expiration of the term of the loan, or under the following circumstances (whichever occurs first):
- At the end of the fifteen-year term of the loan.
- At the time title is transferred to another household – including inheritance and/or gifts.
- If the property is rented out.
- If the property owner is in default with any of the provisions provided in the FTHB loan promissory note and deed of trust.
Maximum Loan Amount
The maximum FTHB loan amount is $60,000 or 20% of the property purchase price, whichever is less. Monthly housing costs must fall between 28% and 45% of the households combined total gross monthly income. The FTHB loan amount will be reduced if the household’s housing ratio falls below 28%. For more information, see Applicant Eligibility Requirements. Households will also learn more about housing ratios and debt ratio through the required homebuyer education course that must be completed to secure final approval for the FTHB loan.