Incorporating homestead use rights into companies is consistent with existing policy frameworks and statutory provisions, but it currently faces several challenges, including an unclear legal nature, ambiguous distribution of appreciation gains, and the potential risk of farmers losing their homesteads. To remove these institutional obstacles, the homestead use right should be defined as a pure usufruct, while the eligibility right retains its identity attributes. Furthermore, concrete institutional arrangements should be developed, including diversified investment methods for shareholding, improved corporate governance, and safeguards against bankruptcy shocks, so as to achieve a coordinated consideration of property value and residential value.