Abstract
The financial crisis which has been arisen from subprime mortgage causes the global economy into an ordeal. The main reason is that buyers do not have enough affordability, but they have to suffer the risk of increasing market rate and decreasing house price. Therefore, during the house market bubble, buyers cannot afford the above two risks and then default. In the past, there is a method to solve those problems. That is the Shared-Appreciation Mortgages(SAMs) which is placed in Scotland and SAMs can let buyers face lower rate, so they afford less. It would, however, generate moral hazard. Thus, a new method is created to settle these problems, and it is Home Appreciation Participation Notes(HAPNs). Although there has already been basic framework of HAPNs, it still do not be issued publicly. The objective of this paper is to price HAPNs, thus, the study use Gamma model in uncertain holding period and coordinate with dispersion among persons and different levels of appreciation share. As the price system is established, HAPNs can be easily implemented under the current market environments.