A smaller first mortgage on the same house.
The family invests in Tufa First Home Fund. The fund places an appreciation-based second on the home, funded at closing. The first mortgage is smaller, at a lower loan-to-value. The buyer’s own down payment is unchanged, and combined loan-to-value is capped at 100 percent.
What the loan looks like.
Compared with the same borrower buying the same home with the same down payment at 97 percent loan-to-value with mortgage insurance, the first mortgage is smaller, its loan-to-value is lower, and its monthly payment is lower.
There is no monthly payment on the second and nothing accrues over time, so it adds nothing to the borrower’s debt-to-income.
The second’s amount is a share of the home’s value and moves with it, so the homeowner is never underwater to it.
What stays the same.
- Once the variance is in place, the first mortgage is underwritten, delivered, serviced and pooled as any conforming loan with a Community Second behind it.
- The appraisal.
- Title and closing, on the GSE standardized subordinate instrument.
- The lender’s file carries the borrower and contract price, never the family member.
- Capital never passes through the buyer.
Agency treatment.
The structure is designed to fit Fannie Mae’s Community Seconds framework. A variance request covering provider eligibility, first-lien lender funding and the form of the instrument is pending through a seller/servicer.
Nothing on this page states or implies approval, review or endorsement by Fannie Mae or Freddie Mac. Freddie Mac treatment is a separate question.
How participation will work.
Participation is designed around a standardized participation agreement and closing instructions, modeled on state housing finance agency down payment programs, so that the Shared Appreciation Agreement works with any first-lien lender.
The Amount Advanced is funded at closing. Under the primary flow, the first-lien lender advances it and assigns the Agreement to the fund at par under a committed forward purchase, subject to the pending variance. Where a lender prefers, the fund or its licensed affiliate originates the Agreement directly in the states where it is licensed.
The buyer must be a first-time homebuyer, as defined in the FAQ.
The participation agreement and closing instructions are in development. Lenders who want to be notified when they are available can register interest below.
Where it is available.
This is not open yet. At launch, loans will be originated by a licensed mortgage lender in select states, with additional lenders over time.
FamilyBacked Mortgage, Inc. (NMLS 2805546) is an affiliated lender. Participation is open to any first-lien lender on the same terms.