Term Ownership's Financial Structure

There are many ways to financially structure any given Term Ownership transaction.  Here, we will focus on a 5-year  Ownership term.  For this example, the 5-year ter's purchase price will cost the homeowner 30% of the home's current fair market value.  If this amount is financed, it is fully amortized over the 5 year term.  Term Ownership periods will likely be between 5 and 15 years.

The balance, plus closing costs, is an "investment" component contributed either by the purchaser's lender or by a separate investor.

At the Term's conclusion, the term owner must choose either to buyout the investor's interest in the property or to let the full ownership interest pass by operation of law to the investor.  The buyout can be direct through traditional refinancing (or re-terming with the investor), or indirect by selling the property to a third party (and pocketing a share of the equity, if any).

Term Ownership is a shared appreciation financing product.  As such, the buyout price will include a share of the appreciation.