Home Ownership Alternatives: A New Financing Paradigm for Affordable Home Ownership

Home Ownership Alternatives (HOA) is a non-profit organization in Toronto helping low- and moderate-income families buy affordable homes. Since 1998, it has helped over 2,500 families own homes that are priced 10–15% below market rates. HOA works with developers to build low-cost apartments, townhouses, and duplexes, and provides special loans called shared appreciation second mortgages. These loans reduce how much a buyer needs to borrow from a bank and are only paid back—with a share of the home’s increased value—when the home is sold.
HOA supports families who earn too much for social housing but can’t afford regular homeownership. Most buyers earn less than $53,000 a year, and many are essential workers like teachers or nurses. Families must provide at least a 5% down payment and qualify for a bank mortgage, keeping their housing costs below 32% of their income. This is not sub-prime lending.
Instead of charging interest, HOA’s second mortgage earns a share of the home’s future value increase. If home prices fall, HOA shares the loss. All repayments go into a revolving fund to help future buyers.
HOA also gives early-stage loans to developers for land and planning. These developers cut costs by building without luxury extras and by selling homes before construction begins.
Homes are built to high environmental standards, using local materials and energy-saving features like solar heating and water meters. HOA often builds in urban areas close to public transport, helping reduce car use and sprawl.
The program has proven financially sustainable with low default rates and growing support from governments and credit unions. HOA has inspired similar models in other Canadian cities and abroad. It promotes mixed-income communities and helps working families turn rent into equity.