Quote:
Originally Posted by Cowboy89
It's only a 'gift' if house prices decrease, even so the treatment of a 'forgivable' loan means you still pay interest on that factored into your mortgage price. As you probably already know appreciation on the value of your property will be split.
Is saving $22K really that unreasonable to expect of someone to become a homeowner?
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The appreciation split is still a good deal for the buyers, since they don't have to pay back the 20k. On a 200,000 property, if the buyer lives in it for 5 years, and appreciation is 3% per year, it'd be worth 231,854. If they sold at that point, the 25% that the organization keeps would be just under 8,000. To repay 8k to clear a 20k debt is a good deal, IMO.
Obviously I made some assumptions, but I think they're reasonable. Even 10 years at 3% appreciation would only have the buyer paying back 17,195 at the end, so still a good deal.