Shared Appreciation Mortgage (SAM)
Definition of "Shared Appreciation Mortgage (SAM)"
A type of equity participation loan where, in exchange for charging a below-market interest rate, the lender receives a predetermined percentage of a any increase in value of the property over a specified period of time. To illustrate, a lender who would otherwise charge 10% interest, might agree to take &% interest plus one-third of the appreciation of the property. For the lender, the money received from the appreciation of the property increases the effective yield on the investment. The borrower, by agreeing to share appreciation in property value gets a lower interest rate, which in turn reduces the monthly mortgage payment. A SAM is normally written so that at the end of the shared appreciation period, the property will be appraised and the amount due to the lender through appreciation is due at that time.
Popular Real Estate Terms
A rental stipulation a varying rental rate. Rental rate are determined tied to periodic appraisals or an inflation or an inflation index. The provision is more common in a long-term leases. ...
A two-by-four used for wall resilience and partitioning. Studs rest on it. ...
A clause that may be inserted in a listing agreement stating no commission will be paid to the broker until the property title has actually been transferred. Normally, willing and able ...
An insurance contract or home warranty, usually for one year, covering electrical, plumbing, heating, etc. ...
Created by the US Congress in 1965, the Department of Housing and Urban Development (HUD) is the agency principally responsible for federal programs relating to housing and urban ...
Roof with one side that is at a sloped angle. ...
Group of investors pooling their money to purchase real estate. ...
Retail businesses next to each other with common walls on each side and the same roof. ...
It is intended to stimulate private investment in distressed cities and urban counties by providing federal "seed money' to attract private funds for such projects as industrial parks and ...
Have a question or comment?
We're here to help.