The low-income buyer purchases a house with the structure of a down payment for equity, mezzanine finance, and debt. The equity comes from two sources, the borrower’s resources and a drawing from a rotating savings account. The equity fund pools contributions from individuals wanting to buy a home. The funds are deposited centrally in a trust account at a participating depository lender. Individuals sign a contract to make contributions to the pool annually for a given number of years. Once the pool is complete for that year, all members who have not previously won have the right to bid for the entire pool. Early recipients of the pool
are the equivalent of a fast-pay tranche in a debt-oriented mortgage-backed security. Late recipients are the residual or slow-pay tranche investors, receiving their funds sequentially
after others have been paid.