SHARE Act

Tax Exclusion for Borrowers: Under Section 2(a)(1), gross income would not include amounts received by a lender that exceed the original principal obligation of a shared appreciation mortgage. This applies if the borrower's income is within specific limits and the property is their principal residence.

Protection for Income-Limited Homeowners: Section 2(a)(1)(A) limits the exclusion to borrowers whose income does not exceed 140 percent of the area median income for their specific census tract.

Capital Asset Gain Exclusion: Section 2(a)(1)(2) provides that any gain from the disposition of assets composed of or secured by these specific mortgages would not be included in gross income.

Strict Eligibility Requirements: According to Section 2(b), a shared appreciation mortgage must meet several specific criteria to qualify, such as the mortgage amount not exceeding 49 percent of the purchase price and the requirement that the borrower makes no payments other than the one described in the contract.

Repayment Limitations: Section 2(b)(5) dictates that repayment cannot occur before specific events, such as the sale of the property or the maturity of the first lien, which could impact the flexibility of the mortgage arrangement.

Specific Property Constraints: Section 2(b)(1) requires that the mortgagee's share of the property's net appreciated value cannot exceed a specific quotient based on the mortgage amount and purchase price, which limits the potential upside for the lender.