Limited Equity Housing Law and Legal Definition

Limited equity housing is an arrangement designed to encourage low and moderate income families to purchase houses at an extremely favorable price, and with a low down payment. It is a co-operative housing complex designed for low-income families who become owners and share in management decisions. However, upon sale of the house, the owner does not get the market value of the house. Any profit returns to the organization that built the home. The limits on resale profits help maintain a low price for subsequent owners. Limited equity housings are evaluated on the basis of:

1. the effect of resident participation on operating costs;

2. the disutility of time and effort that members devote to co-op activities;

3. the intangible benefits of co-op living;

4. the degree of subsidization; and

5. the financial viability.