Legal Definitions - limited equity housing

Limited equity housing (LEHCs) is a type of housing arrangement managed by a nonprofit cooperativecorporation. It is designed to provide affordable housing to low-income families.

LEHCs were introduced in the mid-20th century in the United States when the government converted wartime housing into residential complexes for low-income families.

In a LEHC, residents share ownership of a building with multiple families. To maintain affordability, the co-op takes out a blanket mortgage covering the entire property and allows residents to buy shares. The amount of equity that a member can earn upon resale of the unit is limited to preserve its affordable price.

For example, if a resident buys a share in a LEHC for $10,000 and sells it for $15,000, they may only be able to keep a portion of the profit, as determined by the co-op's rules. This ensures that the unit remains affordable for future low-income residents.

LEHCs are beneficial for low-income families who cannot afford to buy a home on their own. They provide a way for families to build equity and invest in their future while still maintaining affordable housing.