Chapter 167E of the General Laws is hereby amended by adding the following section:-

Section 17. (a) A bank may make or acquire a shared appreciation mortgage loan, pursuant to a program for shared appreciation mortgage loans which has been submitted to and approved by the commissioner, to the owner of real estate improved with a dwelling designed to be occupied by not more than 4 families; provided, however, that the owner shall occupy the mortgaged real estate in whole or in part.

(b) For the purposes of this section, the term “shared appreciation mortgage loan” shall mean a mortgage loan containing an agreement between the mortgagor and the holder of the mortgage loan that provides for the holder to share in the appreciation of the value of the residential property upon sale of the residential property in exchange for a reduced interest rate or principal amount of the mortgage loan for the mortgagor. For purposes of this section, the appreciation of the residential property shall be measured as the difference, if positive, between the gross sales proceeds of the sale of the residential property and the value of the residential property at the time of the closing of the shared appreciation mortgage loan, as determined by an appraisal by a state-certified general real estate appraiser or a state-certified residential real estate appraiser as defined by section 178 of chapter 112.

(c) The terms of the shared appreciation mortgage loan shall contain the following restrictions:

         (i) the holder of the shared appreciation mortgage loan shall not be entitled to more than 25 per cent of the appreciation value; and

         (ii) the term of the shared appreciation mortgage loan shall not exceed 10 years. 

(d) The commissioner shall promulgate regulations necessary to carry out this section.