Lenders get a tax break on home equity gains—borrowers don't
H.R. 8116 — SHARE Act · Filed by Blake Moore (R-UT) · 5 cosponsors · Introduced Mar 26, 2026 · Referred to committee
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What it does
This bill excludes from federal income tax any gains that lenders receive from shared appreciation mortgages (SAMs)—second mortgages where the lender shares in home appreciation—when the borrower's income was below 140% of area median income and the property was their primary residence. It also exempts gains from selling assets composed of or secured by such mortgages. The tax break applies retroactively to amounts received after December 31, 2025.
Why we flagged it
The bill's operative mechanism is a federal income tax exclusion for lenders' gains on shared appreciation mortgages. While framed as expanding homeownership access, the tax benefit runs directly to lenders, not borrowers, and is structured as a narrow industry incentive rather than a broad homeownership or affordability measure.
What the text implies
- The tax exclusion benefits lenders regardless of whether they reduce borrowing costs for homebuyers; there is no requirement that the tax savings be passed to borrowers, creating a pure lender subsidy.
- Shared appreciation mortgages require borrowers to surrender a percentage of home equity gains to the lender; the tax incentive may encourage lenders to market these products more aggressively to moderate-income households, who may not fully understand the long-term cost of sharing appreciation.
The full analysis lists 5 implications of this text.
Who stands to gain
mortgage lenders and servicers; financial institutions offering shared appreciation products; real estate investment firms holding SAM portfolios