SAM (redirected from Sams)

See Shared Appreciation Mortgage.

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shared appreciation mortgage (SAM)

A mortgage arrangement that virtually disappeared for many years and is now making a reappearance.The borrower receives a lower interest rate on the mortgage loan in exchange for agreeing to pay the lender some of the profits when the property is sold. Every agreement will be different, but one example would be a reduction of one-half of 1 percent in the interest rate in return for 20 percent of the profit from a sale. Under IRS Revenue Ruling 83-51, the shared appreciation paid to the lender when the property is sold will be deductible interest in the year in which it is paid, but only if the lender is paid in cash, not via a refinance of the mortgage.

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Shared Appreciation Mortgage (SAM)

A mortgage on which the borrower gives up a share in future price appreciation in exchange for a lower interest rate and/or interest deferral.

SAMs in the private market had a brief flurry in the early '80s but died out quickly and an attempt to revive them in 2000 was unsuccessful. Some cities on the West Coast offer second mortgage SAMs to residents with incomes below some maximum. Reverse mortgage SAMs have also appeared in small numbers.