Home Sharing and Reverse Mortgages Present Rising Solution for Seniors

While seniors have long established official and unofficial home sharing agreements that can be mutually beneficial for the homeowner as well as the home “sharer,” some are finding that the solution is even more useful in today’s down economy. They are also rolling home sharing and reverse mortgages into one, to find an even stronger benefit in some cases.

Take the University of Michigan’s HOMESHARE program, for example. In the last year alone, the program has seen a 10% increase in the number of applications received. That increase measures around 15% from the time period between 2007 and today.

“A lot more people are looking at sharing their homes,” says Ryan Cowmeadow, the program coordinator and vice president of the National Shared Housing Resource Center. “We attribute this to the [current state of the] economy, in many ways.”

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Some of those homeowners looking to home sharing agreements are reverse mortgage borrowers, says Cowmeadow, and so far there “haven’t been any issues” with the borrowers participating in the program.

About 60% of people who share their homes are “house rich and cash poor” and live on a fixed income, the Affordable Living for the Aging (ALA) notes in Shared Housing: Best Practices, Challenges & Recommendations, making the model an alternative—or a supplement—to reverse mortgages. Seniors (45%) and low-income individuals account for about 80% of participants, according to the ALA.

While a formalized shared housing model emerged in the 1970s following communal living trends of the ’60s, the movement has experienced “dramatic swings” in popularity, according to the ALA. There are currently about 65 programs registered as members of the National Shared Housing Resource Center—down from peaks seen in the late ’80s and early ’90s, but indicative of a growth trend. The programs are responsible for making an estimated 3,000-5,000 co-housing matches each year, says Cowmeadow.

Many agencies are reporting “significant inquiries and interest” in launching new programs, says ALA, and this renewed interested is “motivated by the need to meet surging demand for affordable housing in a time of shrinking subsidies and economic distress.”

More and more people are looking at the option of staying in their homes, where they want to be, says Cowmeadow, referencing a statistic AARP regularly reports that 90% of older people want to “age in place” and stay at home for “as long as possible.”

However, the older population has encountered several “hiccups” that have prevented many of them from being able to do that, he continues, including a down economy.

“Home sharing exists as a great way to help make ends meet,” he says.

While each shared housing situation is different, Cowmeadow says there is one obvious trend: More homeowners are looking for financial support more than they’re seeking chore assistance help. However, the contracts for the home sharing program can outline both financial responsibilities and chore responsibilities, he says.

Due to legal reasons, the home seekers can’t provide any sort of hands-on or medical care, but they can help seniors maintain independence by helping out with laundry, yard work, house cleaning, or transportation.

Homeowners participating in the University of Michigan’s home sharing program must be age 55 or older. Those accepted into the program may be paired with other seniors, or with anyone aged 18 or older who is looking for affordable housing. There are a fair amount of intergenerational matches, Cowmeadow notes.

The average age of homeowners participating in the HOMESHARE program is 72, he says, while the average age of home seekers is about 42. Those averages have remained pretty consistent in the past couple years, says Cowmeadow.

While the model hasn’t exactly swept the nation yet in terms of widespread use, it may be gaining more familiarity.

“There’s a much stronger push to help bring home-sharing to the main stream,” says Cowmeadow. “Hopefully, we’ll see more programs pop up in the coming years.”

Written by Alyssa Gerace

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