NEW YORK (MainStreet)—Homeownership is a daunting, at times seemingly unattainable dream for many Americans—what with total student debt at $1 trillion, a national unemployment/underemployment rate at 14.3%and median household income dropping 7.8% since 2007. The average home price in the U.S. is a whopping $202,000, and the subprime mortgage crisis did nothing to quell anxiety. In fact, this year the American homeownership rate dropped to 65%, its lowest point since 1995.
That’s the new system proposed by PRIMARQ, which is a capital market system that uses equity share finance to achieve two ends: first, to allow a person to become a homeowner of a property that otherwise would have been difficult or impossible to attain and second, to provide a platform whereby investors can gain exposure to the residential real estate asset class.
Whichever side of the equation you’re on, this is a framework that is turning the housing market as we know it on its head.
If you don’t have 20% to put down on your house, you can simply co-own your house with investors. Or, say you’re stuck in a 6.5% mortgage but don’t have enough home equity to refinance? You can sell shares in your home to investors and make your domicile a joint venture.
Essentially, the home occupant can supplement a down-payment or qualify for mortgage refinancing such that he doesn’t have to put all of his liquidity in a single basket.
When the house is sold and the bank is paid back, the owner-occupant and the investors share the profits.