Monday, October 2, 2023

The HomeBridge program can help lower- and middle-income residents buy often modest homes, such as this one in North Cambridge visited in March 2019. (Photo: Marc Levy)

The HomeBridge program, which provides financial help for first-time homebuyers, may change as soon as early next year to let participants pass down property to family and help build generational wealth.

The City Council voted unanimously Aug. 1 to talk further in a Housing Committee hearing about a Community Development Department report hinting at improvements to the program, including possible inheritance options and an updated resale formula. The CDD’s timeline expects proposals this year for decision-making “by early 2023.”]

As the program stands, a property cannot be inherited when the homeowner dies, with very limited exceptions. A child of the owner may buy the home if they are income-eligible and can afford it.

Participation in HomeBridge was limited until 2021 to people earning up to the area median income, but now 60 percent to 120 percent of AMI is allowed; that’s up to $117,840 for a single person or $151,440 for a family of three.

Changes to the 30-year-old program – adding up over the years to around 550 units, or 1 percent of housing stock in Cambridge – may also include the way a home is priced at the time of sale. Currently, that’s based on a “return on equity” model tied to treasury bill rates in which property values can vary a lot among owners, according to the report.

Financial return is “very modest” for the homeowner and does not build wealth. “Our initial analysis of resale prices and affordability indicates that the return to owners can be increased without compromising permanent affordability, and that there are options to make the resale formula more beneficial, transparent and equitable for owners,” the report says.

Solutions are referred to in the report but not listed, and would await a Housing Committee presentation. A possible added program following a “shared equity” model from San Francisco is described, and if adopted could put $5.5 million toward 12 to 18 homeownership opportunities annually for groups “historically excluded from market homeownership.”

Chris Cotter, housing director at the CDD, said listening sessions with current homeowners will start in September to get their perspective on changes. The department also expects survey results by late summer.

“It looks like there’s been a lot of deep conversations and lots of deep analysis on our homeownership programs and how to move them forward to ensure the generational wealth that comes with homeownership,” councillor Alanna Mallon said before the vote.