property
The Shared Equity Scheme Explained Step by Step
Baton Rouge first-time buyers can use the shared equity program to cut upfront costs on homes priced under $300,000.
How we reported this
The East Baton Rouge Parish shared equity scheme opened applications on July 1 for first-time buyers who put down as little as 3 percent on eligible properties.
Home prices in Baton Rouge climbed 9 percent over the past year, pushing the median sale price to $285,000 in June, according to parish assessor records. That increase has shut out many young workers and families who once expected to buy near their jobs at the state capitol or LSU.
The program operates through the Capital Area Finance Authority and pairs buyers with the parish on homes in the Mid City neighborhood and along Government Street. Participants receive a second mortgage that covers up to 20 percent of the purchase price in exchange for a share of future appreciation.
Buyers must earn no more than 120 percent of the area median income, currently $78,400 for a household of four. The scheme requires the home to serve as the buyer’s primary residence for at least five years.
How the shared equity steps work
First, applicants complete a pre-qualification form through the Capital Area Finance Authority website and submit proof of income and credit score above 620. Second, approved buyers attend a two-hour counseling session at the authority’s office on North Boulevard. Third, they select a home listed under the program cap and secure primary financing from a participating lender. Fourth, the parish records its equity share on the deed. Fifth, when the owner sells or refinances after year five, the parish receives its percentage of any gain.
The process typically takes 45 to 60 days from approval to closing, according to authority staff.
Local prices and next steps
Recent sales under the scheme include a three-bedroom on North 19th Street that closed at $262,000 with the parish covering $52,400. Buyers who complete the steps can contact the authority at its downtown office before the next funding round closes on August 15.
This article is general information only and is not personal financial or investment advice. Consider your own circumstances and seek licensed professional advice before making financial decisions.