Considerations for potential buyers thinking about co-ownership

In April 2025, the City of Boston launched a new Co-Purchasing Housing Pilot Program (“Program”). The Program, which is one of several City initiatives adopted in accordance with Mayor Wu’s Boston’s 2025 Housing Strategy, is a new loan program intended to improve homeownership opportunities by encouraging co-purchasing as a way for multiple households to leverage their combined purchasing power to acquire multifamily properties in the City of Boston. Zero-percent interest deferred loans, payable upon sale, transfer, or refinance, to help participating households cover the costs of the down payment and reasonable closing costs, will be offered for eligible households earning up to 135% of the area median income (AMI).

Potential first-time homebuyers may jump at the opportunity for co-ownership, excited by the prospect of owning a home but not realizing how difficult common ownership is until real problems come home to roost.

The Program is designed to promote co-ownership of multifamily properties in the City of Boston, but it appears to only support participating homebuyers in the purchase of multifamily properties to be held in common ownership, as joint tenants or tenants-in-common. The Program is not designed to support groups of homebuyers who wish to purchase and own a multifamily property through a trust or corporation, and in fact, actively discourages participants from purchasing a multifamily property for ownership through the condominium form. By expressly deterring participants from using the condominium form of ownership, the Program may leave co-owners without the necessary tools for successful ownership of a multifamily property.

Eligibility, Requirements, & Benefits

Participants in the Program can receive zero-percent interest deferred loans, payable upon sale, transfer, or refinance, to help cover the costs of down payment (in an amount up to 5% of each household’s share of the purchase price) for the purchase of eligible multifamily properties. Eligible households earning up to 100% AMI (approximately $130,600 in Boston) can receive up to $50,000, and eligible households earning up to 135% AMI (approximately $176,300 in Boston) can receive up to $35,000.

The Program encourages households to come together and leverage their combined purchasing power to purchase multi-family homes in Boston. To be eligible for the Program, each homebuyer must:

- Meet the qualifying criteria for a Boston Home Center (BHC)-approved First Mortgage;

- Be considered a “First-Time Homebuyer”;

- Have an income below or equal to 135% AMI;

- Contribute at least 1.5% of the purchase price of their share of the property;

- Have less than $100,000 in liquid assets (excluding government-sponsored retirement accounts);

- Agree to occupy the home as their primary residence; and

- Enter into a “co-ownership agreement.”

Eligible properties are two- or three-family vacant homes located within the City of Boston, with as many vacant, unoccupied units as participating households listed as joint owners on the mortgage.

In addition to these eligibility criteria, participants must also (1) sign an affidavit expressing their commitment to occupy the property as their primary residence, and (2) agree to create and execute a co-ownership agreement that specifies, at a minimum, the proportion of ownership; how expenses and property maintenance are to be handled; and agreed-upon options or procedures should one or more of the participating households agree to move out or sell.

Types of Ownership & the Co-Ownership Agreement

The information and resources available on the City of Boston’s Website are clear that the purpose of the Program is for participants to enter into common ownership as tenants-in-common or joint tenants. The Program is not expressly designed for ownership in the form of a cooperative or condominium; in fact, the Program resources actively discourage the condominium form, providing that ownership through a corporation, cooperative, or condominium “is not usually the best option for most owner-occupied properties.”

One of the requirements of the Program is that participants agree to, and execute, a co-ownership agreement, and that a finalized, signed version of the agreement is received by the City prior to closing. The “Guide to Co-Purchasing” provides a detailed breakdown of the subjects that can (and should) be included in the co-ownership agreement, such as:

- Decision-making, such as consensus versus voting based on percentage shares;

- The collective use of the property, such as designating common areas and private space;

- Financial and insurance arrangements, such as initial monetary contribution, shared expenses, and major repairs and renovations;

- Managing home operation and upkeep;

- Managing co-owner misconduct, such as misuse of common funds;

- Dispute resolution; and

- What happens if someone wants to move out or sell.

Looking at these recommendations for the co-ownership agreement, I can’t help but notice that many of the suggestions—designating common areas and private space, holding money in a common account for home expenses, and consequences for violations of the co-owner agreement—are some of the basic concepts found in condominium ownership. It is easy to understand why the Program would encourage co-owners to consider these factors, as they address many of the most significant issues that arise from common ownership; however, even if participants create an ownership agreement that contemplates all of the fundamental concepts of condominium ownership, common ownership of the kinds contemplated by the Program can still fall short.

Potential first-time homebuyers may jump at the opportunity for co-ownership, excited by the prospect of owning a home but not realizing how difficult common ownership is until real problems come home to roost. For this reason, I don’t agree with the notion that a condominium is not “the best option” for owner-occupied properties. The condominium form is a valuable way for individual households to enjoy the benefits of common ownership while also affording certain protections from the limitations of traditional common ownership structures. In fact, there is an entire chapter of the Massachusetts General Laws, chapter 183A, governing condominiums and condominium ownership, providing baseline statutory benefits and protections to property owners who participate in community ownership in this particular form. For example, both condominiums and traditional common ownership of multifamily properties encounter the problem where one owner fails to contribute their share to the common expenses, to the detriment of all other owners; however, only a condominium has a mechanism to promptly address this delinquency and, if necessary, foreclose on the unit to collect the unpaid expenses through the statutory lien enforcement process set forth in G.L. c. 183A, § 6.

The purpose of this article is not to take the blanket position that traditional common ownership is always ill-advised, but rather, to increase awareness of the potential drawbacks of common ownership outside the condominium form and to inform readers that homebuyers interested in the Program may wish to consider the benefits of forming a condominium after closing on a multifamily property.

Having said that, it is not entirely clear from the currently available resources on the Program whether participants can take advantage of the financial assistance offered by the Program if they transition from co-ownership to condominium ownership. The Program’s “Frequently Asked Questions” provide that co-purchasers who want to form a condominium organization can do so “after the fact,” but does not go into detail about how or whether doing so would impact the financial assistance offered by the Program. For example, the zero-percent interest deferred loans offered by the Program are “repayable upon sale, transfer, or refinance.” Converting the property to condominium status would necessarily result in a change in ownership type, and require a transfer of the co-owners’ interest by Master Deed. To the extent that a loan granted pursuant to the Program would become repayable in this situation, it is a significant flaw that participants that could not benefit both from the financial assistance offered by the Program and the protections of condominium ownership. There are many reasons why co-purchasers may wish to create a condominium in order to benefit from certain protections that they would not have in a joint tenancy or tenancy-in-common, and it is troubling that the Program may create an ultimatum—if you want the protection of the condominium form, you can’t retain the benefits of your loan and financing.

Conclusion

Homebuyers considering the Program should be aware of the types of co-ownership that are allowed and consider the potential drawbacks of traditional co-ownership as compared to the protections afforded by condominium ownership. The fact that the Program resources appear to actively discourage ownership through the condominium form is indicative of a larger issue with the Program, which is that it apparently prioritizes the statistics of first-time homeownership at the expense of allowing for sustainable ownership structures.

As any homeowner will tell those of us who have never owned a home (I fall into the latter group), nothing prepares you for the unexpected surprises that come with owning a home for the first time. There are also unique, sometimes even more difficult surprises that come with co-owning a home. The condominium form of ownership is a unique thing, which exists as a hybrid form of property ownership—an option for people to own property in common as well as individually, protected from some of the difficulties of traditional common ownership. First-time homebuyers considering the Program should think ahead about the types of problems that may arise as a result of co-ownership, and consider how an alternative, such as transitioning to condominium ownership after closing, might be a better option for added protections down the road.