Limited equity housing - sustany/dvg GitHub Wiki

A limited equity housing (also known as LEHCs) is a special form of residential arrangement that is managed by a nonprofit cooperative corporation. The arrangement usually puts restriction on the amount of equity that a member may earn upon resale of the unit to preserve its affordable price.

The United States introduced LEHCs in the mid-20th century when the federal government converted wartime housing into residential complexes for low-income families. LEHCs allow low-income households to share ownership in buildings for multiple families. To sustain the arrangement�s affordability, the co-op takes out a blanket mortgage covering the entire property and allow residents to buy its shares. The owner�s equity is usually dependent on a pre-determined formula following the co-op�s rules. The owners may also increase their sales price to account for inflation as well as any agreed-upon costs that the owner incurs. Because LEHCs only restrict equity appreciation and not necessarily the owner�s income, sometimes residents with moderate income continue to reside in the property even after their income level does not qualify for affordable housing.