Forward

Grounded Solutions Network, in collaboration with Fannie Mae and Freddie Mac, is pleased to announce the availability of a template deed-restricted covenant and security instrument (the “Model Declaration”) that can be used to develop the legal agreement between a shared equity homeownership (aka “below market rate”) program and a homeowner.

Download the 2021 Model Declaration of Affordability Covenants with Refinance and Resale Restriction and Purchase Option

An Essential Tool for the Field

For years, municipalities and nonprofits seeking to implement shared equity homeownership programs using deed restrictions have asked for template legal documents to secure ongoing affordability, identify best practices, and ensure compliance with the secondary market so that their homebuyers have access to conventional mortgages.

Without a national model deed restriction like the 2011 National Model Ground Lease, each local shared equity program was forced to reinvent the wheel, missing out on important lessons learned about best practices and how to address the requirements of the Fannie Mae and Freddie Mac Selling Guides. In collaboration with Fannie Mae and Freddie Mac, and with the support of practitioner advisors and legal counsel, Grounded Solutions drafted model documents and accompanying Commentary.

We spent well over a year working with these experts with decades of experience in the field to standardize this important aspect of the shared equity homeownership field. These documents will help programs more easily adopt or improve their deed-restricted shared equity homeownership models, abide by best practices and standardize their programs so that shared equity homebuyers may access mortgages originated and sold to Fannie Mae or Freddie Mac.

Key Benefits

This new model document:

Provides a national, standardized template for deed restrictions used by below market-rate homeownership programs administered by municipalities and CLTs or nonprofits that use deed restrictions to deliver shared equity homeownership, such as on condominium projects.
Provides insight into national best practices for effective and equitable shared equity homeownership programs.
Is designed to improve access to mortgages originated and sold to Fannie Mae or Freddie Mac (“conventional financing”).

Users of the Model Declaration must thoroughly review the accompanying Commentary, which offers guidance identifying programmatic choices, optional language, language necessary to satisfy Government Sponsored Enterprise requirements, language required for certain states and programs, and language recommended for review to ensure it satisfies state law and programmatic choices.

Download the Model Declaration and Commentary from Grounded Solutions Network’s Resource Library here.

Download the Model Declaration and Commentary from Grounded Solutions Network’s Resource Library

Want More Help?

Contact [email protected] with any questions about the Model Declaration or to request a Word document version. Stay tuned for opportunities for technical assistance and support for adopting the Model Declaration in 2022!

Where we live matters.

We bring together an extensive network of partners and member practitioners from local communities who have a deep understanding of best practices in community land trusts, shared equity housing, local housing policies such as inclusionary zoning, and more.

At Grounded Solutions Network, we know what policies and strategies work to build and preserve housing opportunities, and we help communities use them.

Grounded Solutions Network

PO Box 70724

Oakland, CA 94612

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