Sponsors (4)
Introduced March 26, 2026 by Blake D. Moore · Last progress March 26, 2026
The bill expands access to homeownership and lowers near-term housing costs by creating tax-favored shared-appreciation mortgage options, but it risks lowering federal revenue, adding legal complexity, and shifting costs onto borrowers over time or enabling tax arbitrage.
Low- and moderate-income borrowers (≤140% AMI) gain access to shared-appreciation mortgage (SAM) payments that lenders can treat as tax-favored, lowering effective housing costs for these borrowers.
Homeowners who sell can exclude the portion of home-sale gain attributable to these SAMs from taxable income, reducing tax liability on disposition.
Prospective homebuyers, especially lower-income households, get expanded financing options because the bill enables standardized shared-appreciation second liens (up to 49% of purchase price), which can increase access to homeownership without adding monthly payments.
Homeowners and low-income borrowers may face higher long-term costs if lenders respond by increasing the share of future appreciation they claim or by tightening underwriting standards.
All taxpayers could be affected by reduced federal tax revenue because of the lender tax exclusion, which may increase deficits or force offsets elsewhere in budgets or taxes.
Borrowers and lenders will face greater transaction costs and legal complexity due to eligibility tests (AMI test, TILA first-lien requirement, subordinate lien limits) and technical rules, potentially limiting uptake or raising closing costs.
Based on analysis of 2 sections of legislative text.
Excludes certain shared-appreciation mortgage payments and related gains from gross income for qualifying subordinate second liens on owner-occupied homes when borrower income is ≤140% of tract AMI.
Creates a tax rule that excludes certain payments and gains tied to shared appreciation mortgages (SAMs) from gross income. The exclusion applies when the loan is a subordinate second lien on a 1–4 family principal residence, the borrower’s income at origination does not exceed 140% of the area median income for the census tract, and amounts are received after December 31, 2025. The bill defines qualifying SAMs and limits the lender’s share and loan size. The change is intended to encourage use of SAMs (agreements where a lender gets a share of home appreciation instead of regular payments) by making the lender’s shared-appreciation receipts and related gains tax-free under federal income tax rules, subject to the defined eligibility tests.