Lack of down payment keeps homeowner hopefuls renting

Posted at 6:08 PM, May 16, 2017
You do this, right? Scroll through Zillow, find your dream home and then try to figure out how in the world you can afford it.
It's not always the monthly payment that's the problem. Sometimes, it's simply what you need to fork over up front.
"We provide part of the down payment needed to purchase a home," Jim Riccitelli, Co-CEO of Unison Homeownership Investors.
The California company Unison is about 12 years old, but it's brand new to the Valley. How does it work?
"There's no interest and there's no payments to us, because it's not debt. It's actually an investment in the home," said Riccitelli.
You don't pay the money back until you sell or after 30 years, whichever comes first. The main caveat is you'll also owe a portion of the appreciation, which Unison's share is typically 35 percent. But if the home loses value, you'll owe the company less.
"If the value has gone down, we'll also share in the depreciation so we can lose money on our investment," Riccitelli said.
According to Zillow, Phoenix is one of the top 20 metropolitan areas where renters say the biggest hurdle to homeownership is the down payment. But could something like this encourage people to buy too much home and contribute to another housing bust? Riccitelli says no.
"The lender is making a determination that the buyer can make the monthly payments, we don't change that at all," he said. "If anything, we make it easier because some people use our program to actually lower the monthly payment."
Applicants for Unison's program must go through an educational training before being approved. The company now offers the service in 12 states nationwide.