Limited equity cooperatives overview
When the LEC is created, initial affordability is typically achieved with some form of government assistance, including construction subsidies and low-interest financing. The price restrictions built into the resale formula limit the equity that LEC residents can gain when they sell their ownership share; it is this feature that also helps to maintain affordability, especially in strengthening housing markets. Some limited equity cooperativeA type of equity homeownership arrangement that allows low-income families to purchase a "share" in a cooperative. An individual with a share is entitled to one unit in the cooperative, and a say in the decision-making regarding the development. At the time of a resale, the return that share owners can earn is limited in order to maintain the affordability of the shares for future purchasers.s allow little or no build-up of equity by homeowners, while others adopt a shared equity approach, balancing the twin goals of long-term affordability and individual wealth creation.
Local department of housing and community development