diff --git a/src/fileops.c b/src/fileops.c
index 6429e55b4..c1824e812 100644
--- a/src/fileops.c
+++ b/src/fileops.c
@@ -272,6 +272,10 @@ int git_futils_mkdir(
 	}
 
 	/* if we are not supposed to made the last element, truncate it */
+	if ((flags & GIT_MKDIR_SKIP_LAST2) != 0) {
+		git_buf_rtruncate_at_char(&make_path, '/');
+		flags |= GIT_MKDIR_SKIP_LAST;
+	}
 	if ((flags & GIT_MKDIR_SKIP_LAST) != 0)
 		git_buf_rtruncate_at_char(&make_path, '/');
 
@@ -303,34 +307,34 @@ int git_futils_mkdir(
 			int already_exists = 0;
 
 			switch (errno) {
-				case EEXIST:
-					if (!lastch && (flags & GIT_MKDIR_VERIFY_DIR) != 0 &&
-						!git_path_isdir(make_path.ptr)) {
-						giterr_set(
-							GITERR_OS, "Existing path is not a directory '%s'",
-							make_path.ptr);
-						error = GIT_ENOTFOUND;
-						goto fail;
-					}
+			case EEXIST:
+				if (!lastch && (flags & GIT_MKDIR_VERIFY_DIR) != 0 &&
+					!git_path_isdir(make_path.ptr)) {
+					giterr_set(
+						GITERR_OS, "Existing path is not a directory '%s'",
+						make_path.ptr);
+					error = GIT_ENOTFOUND;
+					goto fail;
+				}
 
+				already_exists = 1;
+				break;
+			case ENOSYS:
+				/* Solaris can generate this error if you try to mkdir
+				 * a path which is already a mount point. In that case,
+				 * the path does already exist; but it's not implied by
+				 * the definition of the error, so let's recheck */
+				if (git_path_isdir(make_path.ptr)) {
 					already_exists = 1;
 					break;
-				case ENOSYS:
-					/* Solaris can generate this error if you try to mkdir
-					 * a path which is already a mount point. In that case,
-					 * the path does already exist; but it's not implied by
-					 * the definition of the error, so let's recheck */
-					if (git_path_isdir(make_path.ptr)) {
-						already_exists = 1;
-						break;
-					}
+				}
 
-					/* Fall through */
-					errno = ENOSYS;
-				default:
-					giterr_set(GITERR_OS, "Failed to make directory '%s'",
-						make_path.ptr);
-					goto fail;
+				/* Fall through */
+				errno = ENOSYS;
+			default:
+				giterr_set(GITERR_OS, "Failed to make directory '%s'",
+					make_path.ptr);
+				goto fail;
 			}
 
 			if (already_exists && (flags & GIT_MKDIR_EXCL) != 0) {
@@ -714,8 +718,33 @@ typedef struct {
 	mode_t dirmode;
 } cp_r_info;
 
+#define GIT_CPDIR__MKDIR_DONE_FOR_TO_ROOT (1u << 10)
+
+static int _cp_r_mkdir(cp_r_info *info, git_buf *from)
+{
+	int error = 0;
+
+	/* create root directory the first time we need to create a directory */
+	if ((info->flags & GIT_CPDIR__MKDIR_DONE_FOR_TO_ROOT) == 0) {
+		error = git_futils_mkdir(
+			info->to_root, NULL, info->dirmode,
+			(info->flags & GIT_CPDIR_CHMOD_DIRS) ? GIT_MKDIR_CHMOD : 0);
+
+		info->flags |= GIT_CPDIR__MKDIR_DONE_FOR_TO_ROOT;
+	}
+
+	/* create directory with root as base to prevent excess chmods */
+	if (!error)
+		error = git_futils_mkdir(
+			from->ptr + info->from_prefix, info->to_root,
+			info->dirmode, info->mkdir_flags);
+
+	return error;
+}
+
 static int _cp_r_callback(void *ref, git_buf *from)
 {
+	int error = 0;
 	cp_r_info *info = ref;
 	struct stat from_st, to_st;
 	bool exists = false;
@@ -737,24 +766,22 @@ static int _cp_r_callback(void *ref, git_buf *from)
 	} else
 		exists = true;
 
-	if (git_path_lstat(from->ptr, &from_st) < 0)
-		return -1;
+	if ((error = git_path_lstat(from->ptr, &from_st)) < 0)
+		return error;
 
 	if (S_ISDIR(from_st.st_mode)) {
-		int error = 0;
 		mode_t oldmode = info->dirmode;
 
 		/* if we are not chmod'ing, then overwrite dirmode */
-		if ((info->flags & GIT_CPDIR_CHMOD) == 0)
+		if ((info->flags & GIT_CPDIR_CHMOD_DIRS) == 0)
 			info->dirmode = from_st.st_mode;
 
 		/* make directory now if CREATE_EMPTY_DIRS is requested and needed */
 		if (!exists && (info->flags & GIT_CPDIR_CREATE_EMPTY_DIRS) != 0)
-			error = git_futils_mkdir(
-				info->to.ptr, NULL, info->dirmode, info->mkdir_flags);
+			error = _cp_r_mkdir(info, from);
 
 		/* recurse onto target directory */
-		if (!exists || S_ISDIR(to_st.st_mode))
+		if (!error && (!exists || S_ISDIR(to_st.st_mode)))
 			error = git_path_direach(from, _cp_r_callback, info);
 
 		if (oldmode != 0)
@@ -782,15 +809,22 @@ static int _cp_r_callback(void *ref, git_buf *from)
 
 	/* Make container directory on demand if needed */
 	if ((info->flags & GIT_CPDIR_CREATE_EMPTY_DIRS) == 0 &&
-		git_futils_mkdir(
-			info->to.ptr, NULL, info->dirmode, info->mkdir_flags) < 0)
-		return -1;
+		(error = _cp_r_mkdir(info, from)) < 0)
+		return error;
 
 	/* make symlink or regular file */
 	if (S_ISLNK(from_st.st_mode))
-		return cp_link(from->ptr, info->to.ptr, (size_t)from_st.st_size);
-	else
-		return git_futils_cp(from->ptr, info->to.ptr, from_st.st_mode);
+		error = cp_link(from->ptr, info->to.ptr, (size_t)from_st.st_size);
+	else {
+		mode_t usemode = from_st.st_mode;
+
+		if ((info->flags & GIT_CPDIR_SIMPLE_TO_MODE) != 0)
+			usemode = (usemode & 0111) ? 0777 : 0666;
+
+		error = git_futils_cp(from->ptr, info->to.ptr, usemode);
+	}
+
+	return error;
 }
 
 int git_futils_cp_r(
@@ -803,7 +837,7 @@ int git_futils_cp_r(
 	git_buf path = GIT_BUF_INIT;
 	cp_r_info info;
 
-	if (git_buf_sets(&path, from) < 0)
+	if (git_buf_joinpath(&path, from, "") < 0) /* ensure trailing slash */
 		return -1;
 
 	info.to_root = to;
@@ -814,12 +848,16 @@ int git_futils_cp_r(
 
 	/* precalculate mkdir flags */
 	if ((flags & GIT_CPDIR_CREATE_EMPTY_DIRS) == 0) {
+		/* if not creating empty dirs, then use mkdir to create the path on
+		 * demand right before files are copied.
+		 */
 		info.mkdir_flags = GIT_MKDIR_PATH | GIT_MKDIR_SKIP_LAST;
-		if ((flags & GIT_CPDIR_CHMOD) != 0)
+		if ((flags & GIT_CPDIR_CHMOD_DIRS) != 0)
 			info.mkdir_flags |= GIT_MKDIR_CHMOD_PATH;
 	} else {
+		/* otherwise, we will do simple mkdir as directories are encountered */
 		info.mkdir_flags =
-			((flags & GIT_CPDIR_CHMOD) != 0) ? GIT_MKDIR_CHMOD : 0;
+			((flags & GIT_CPDIR_CHMOD_DIRS) != 0) ? GIT_MKDIR_CHMOD : 0;
 	}
 
 	error = _cp_r_callback(&info, &path);
diff --git a/src/fileops.h b/src/fileops.h
index f01f22706..7ba99d3d9 100644
--- a/src/fileops.h
+++ b/src/fileops.h
@@ -65,6 +65,7 @@ extern int git_futils_mkdir_r(const char *path, const char *base, const mode_t m
  * * GIT_MKDIR_CHMOD says to chmod the final directory entry after creation
  * * GIT_MKDIR_CHMOD_PATH says to chmod each directory component in the path
  * * GIT_MKDIR_SKIP_LAST says to leave off the last element of the path
+ * * GIT_MKDIR_SKIP_LAST2 says to leave off the last 2 elements of the path
  * * GIT_MKDIR_VERIFY_DIR says confirm final item is a dir, not just EEXIST
  *
  * Note that the chmod options will be executed even if the directory already
@@ -76,7 +77,8 @@ typedef enum {
 	GIT_MKDIR_CHMOD = 4,
 	GIT_MKDIR_CHMOD_PATH = 8,
 	GIT_MKDIR_SKIP_LAST = 16,
-	GIT_MKDIR_VERIFY_DIR = 32,
+	GIT_MKDIR_SKIP_LAST2 = 32,
+	GIT_MKDIR_VERIFY_DIR = 64,
 } git_futils_mkdir_flags;
 
 /**
@@ -168,13 +170,26 @@ extern int git_futils_cp(
 
 /**
  * Flags that can be passed to `git_futils_cp_r`.
+ *
+ * - GIT_CPDIR_CREATE_EMPTY_DIRS: create directories even if there are no
+ *   files under them (otherwise directories will only be created lazily
+ *   when a file inside them is copied).
+ * - GIT_CPDIR_COPY_SYMLINKS: copy symlinks, otherwise they are ignored.
+ * - GIT_CPDIR_COPY_DOTFILES: copy files with leading '.', otherwise ignored.
+ * - GIT_CPDIR_OVERWRITE: overwrite pre-existing files with source content,
+ *   otherwise they are silently skipped.
+ * - GIT_CPDIR_CHMOD_DIRS: explicitly chmod directories to `dirmode`
+ * - GIT_CPDIR_SIMPLE_TO_MODE: default tries to replicate the mode of the
+ *   source file to the target; with this flag, always use 0666 (or 0777 if
+ *   source has exec bits set) for target.
  */
 typedef enum {
-	GIT_CPDIR_CREATE_EMPTY_DIRS = 1,
-	GIT_CPDIR_COPY_SYMLINKS = 2,
-	GIT_CPDIR_COPY_DOTFILES = 4,
-	GIT_CPDIR_OVERWRITE = 8,
-	GIT_CPDIR_CHMOD = 16
+	GIT_CPDIR_CREATE_EMPTY_DIRS = (1u << 0),
+	GIT_CPDIR_COPY_SYMLINKS     = (1u << 1),
+	GIT_CPDIR_COPY_DOTFILES     = (1u << 2),
+	GIT_CPDIR_OVERWRITE         = (1u << 3),
+	GIT_CPDIR_CHMOD_DIRS        = (1u << 4),
+	GIT_CPDIR_SIMPLE_TO_MODE    = (1u << 5),
 } git_futils_cpdir_flags;
 
 /**
diff --git a/src/refs.c b/src/refs.c
index cca3f3ec8..113cadad5 100644
--- a/src/refs.c
+++ b/src/refs.c
@@ -1599,7 +1599,8 @@ static int ensure_segment_validity(const char *name)
 {
 	const char *current = name;
 	char prev = '\0';
-	int lock_len = strlen(GIT_FILELOCK_EXTENSION);
+	const int lock_len = (int)strlen(GIT_FILELOCK_EXTENSION);
+	int segment_len;
 
 	if (*current == '.')
 		return -1; /* Refname starts with "." */
@@ -1620,12 +1621,14 @@ static int ensure_segment_validity(const char *name)
 		prev = *current;
 	}
 
+	segment_len = (int)(current - name);
+
 	/* A refname component can not end with ".lock" */
-	if (current - name >= lock_len &&
+	if (segment_len >= lock_len &&
 		!memcmp(current - lock_len, GIT_FILELOCK_EXTENSION, lock_len))
 			return -1;
 
-	return (int)(current - name);
+	return segment_len;
 }
 
 static bool is_all_caps_and_underscore(const char *name, size_t len)
@@ -1700,7 +1703,7 @@ int git_reference__normalize_name(
 		/* No empty segment is allowed when not normalizing */
 		if (segment_len == 0 && !normalize)
 			goto cleanup;
-		
+
 		if (current[segment_len] == '\0')
 			break;
 
diff --git a/src/repo_template.h b/src/repo_template.h
index 90ffe851b..099279aa7 100644
--- a/src/repo_template.h
+++ b/src/repo_template.h
@@ -11,10 +11,10 @@
 #define GIT_OBJECTS_PACK_DIR GIT_OBJECTS_DIR "pack/"
 
 #define GIT_HOOKS_DIR "hooks/"
-#define GIT_HOOKS_DIR_MODE 0755
+#define GIT_HOOKS_DIR_MODE 0777
 
 #define GIT_HOOKS_README_FILE GIT_HOOKS_DIR "README.sample"
-#define GIT_HOOKS_README_MODE 0755
+#define GIT_HOOKS_README_MODE 0777
 #define GIT_HOOKS_README_CONTENT \
 "#!/bin/sh\n"\
 "#\n"\
@@ -23,16 +23,16 @@
 "# more information.\n"
 
 #define GIT_INFO_DIR "info/"
-#define GIT_INFO_DIR_MODE 0755
+#define GIT_INFO_DIR_MODE 0777
 
 #define GIT_INFO_EXCLUDE_FILE GIT_INFO_DIR "exclude"
-#define GIT_INFO_EXCLUDE_MODE 0644
+#define GIT_INFO_EXCLUDE_MODE 0666
 #define GIT_INFO_EXCLUDE_CONTENT \
 "# File patterns to ignore; see `git help ignore` for more information.\n"\
 "# Lines that start with '#' are comments.\n"
 
 #define GIT_DESC_FILE "description"
-#define GIT_DESC_MODE 0644
+#define GIT_DESC_MODE 0666
 #define GIT_DESC_CONTENT \
 "Unnamed repository; edit this file 'description' to name the repository.\n"
 
diff --git a/src/repository.c b/src/repository.c
index c28a0882d..278abfaf2 100644
--- a/src/repository.c
+++ b/src/repository.c
@@ -935,7 +935,7 @@ static int repo_write_gitlink(
 	error = git_buf_printf(&buf, "%s %s", GIT_FILE_CONTENT_PREFIX, to_repo);
 
 	if (!error)
-		error = repo_write_template(in_dir, true, DOT_GIT, 0644, true, buf.ptr);
+		error = repo_write_template(in_dir, true, DOT_GIT, 0666, true, buf.ptr);
 
 cleanup:
 	git_buf_free(&buf);
@@ -945,7 +945,7 @@ cleanup:
 static mode_t pick_dir_mode(git_repository_init_options *opts)
 {
 	if (opts->mode == GIT_REPOSITORY_INIT_SHARED_UMASK)
-		return 0755;
+		return 0777;
 	if (opts->mode == GIT_REPOSITORY_INIT_SHARED_GROUP)
 		return (0775 | S_ISGID);
 	if (opts->mode == GIT_REPOSITORY_INIT_SHARED_ALL)
@@ -1006,17 +1006,9 @@ static int repo_init_structure(
 			tdir = GIT_TEMPLATE_DIR;
 		}
 
-		/* FIXME: GIT_CPDIR_CHMOD cannot applied here as an attempt
-		 * would be made to chmod() all directories up to the last
-		 * component of repo_dir, e.g., also /home etc. Recall that
-		 * repo_dir is prettified at this point.
-		 *
-		 * Best probably would be to have the same logic as in
-		 * git_futils_mkdir(), i.e., to separate the base from
-		 * the path.
-		 */
 		error = git_futils_cp_r(tdir, repo_dir,
-			GIT_CPDIR_COPY_SYMLINKS /*| GIT_CPDIR_CHMOD*/, dmode);
+			GIT_CPDIR_COPY_SYMLINKS | GIT_CPDIR_CHMOD_DIRS |
+			GIT_CPDIR_SIMPLE_TO_MODE, dmode);
 
 		if (error < 0) {
 			if (strcmp(tdir, GIT_TEMPLATE_DIR) != 0)
@@ -1051,6 +1043,17 @@ static int repo_init_structure(
 	return error;
 }
 
+static int mkdir_parent(git_buf *buf, uint32_t mode, bool skip2)
+{
+	/* When making parent directories during repository initialization
+	 * don't try to set gid or grant world write access
+	 */
+	return git_futils_mkdir(
+		buf->ptr, NULL, mode & ~(S_ISGID | 0002),
+		GIT_MKDIR_PATH | GIT_MKDIR_VERIFY_DIR |
+		(skip2 ? GIT_MKDIR_SKIP_LAST2 : GIT_MKDIR_SKIP_LAST));
+}
+
 static int repo_init_directories(
 	git_buf *repo_path,
 	git_buf *wd_path,
@@ -1058,14 +1061,36 @@ static int repo_init_directories(
 	git_repository_init_options *opts)
 {
 	int error = 0;
-	bool add_dotgit, has_dotgit, natural_wd;
+	bool is_bare, add_dotgit, has_dotgit, natural_wd;
 	mode_t dirmode;
 
+	/* There are three possible rules for what we are allowed to create:
+	 * - MKPATH means anything we need
+	 * - MKDIR means just the .git directory and its parent and the workdir
+	 * - Neither means only the .git directory can be created
+	 *
+	 * There are 5 "segments" of path that we might need to deal with:
+	 * 1. The .git directory
+	 * 2. The parent of the .git directory
+	 * 3. Everything above the parent of the .git directory
+	 * 4. The working directory (often the same as #2)
+	 * 5. Everything above the working directory (often the same as #3)
+	 *
+	 * For all directories created, we start with the init_mode value for
+	 * permissions and then strip off bits in some cases:
+	 *
+	 * For MKPATH, we create #3 (and #5) paths without S_ISGID or S_IWOTH
+	 * For MKPATH and MKDIR, we create #2 (and #4) without S_ISGID
+	 * For all rules, we create #1 using the untouched init_mode
+	 */
+
 	/* set up repo path */
 
+	is_bare = ((opts->flags & GIT_REPOSITORY_INIT_BARE) != 0);
+
 	add_dotgit =
 		(opts->flags & GIT_REPOSITORY_INIT_NO_DOTGIT_DIR) == 0 &&
-		(opts->flags & GIT_REPOSITORY_INIT_BARE) == 0 &&
+		!is_bare &&
 		git__suffixcmp(given_repo, "/" DOT_GIT) != 0 &&
 		git__suffixcmp(given_repo, "/" GIT_DIR) != 0;
 
@@ -1078,7 +1103,7 @@ static int repo_init_directories(
 
 	/* set up workdir path */
 
-	if ((opts->flags & GIT_REPOSITORY_INIT_BARE) == 0) {
+	if (!is_bare) {
 		if (opts->workdir_path) {
 			if (git_path_join_unrooted(
 					wd_path, opts->workdir_path, repo_path->ptr, NULL) < 0)
@@ -1110,30 +1135,45 @@ static int repo_init_directories(
 
 	dirmode = pick_dir_mode(opts);
 
-	if ((opts->flags & GIT_REPOSITORY_INIT_MKDIR) != 0 && has_dotgit) {
-		git_buf p = GIT_BUF_INIT;
-		if ((error = git_path_dirname_r(&p, repo_path->ptr)) >= 0)
-			error = git_futils_mkdir(p.ptr, NULL, dirmode, 0);
-		git_buf_free(&p);
+	if ((opts->flags & GIT_REPOSITORY_INIT_MKPATH) != 0) {
+		/* create path #5 */
+		if (wd_path->size > 0 &&
+			(error = mkdir_parent(wd_path, dirmode, false)) < 0)
+			return error;
+
+		/* create path #3 (if not the same as #5) */
+		if (!natural_wd &&
+			(error = mkdir_parent(repo_path, dirmode, has_dotgit)) < 0)
+			return error;
+	}
+
+	if ((opts->flags & GIT_REPOSITORY_INIT_MKDIR) != 0 ||
+		(opts->flags & GIT_REPOSITORY_INIT_MKPATH) != 0)
+	{
+		/* create path #4 */
+		if (wd_path->size > 0 &&
+			(error = git_futils_mkdir(
+				wd_path->ptr, NULL, dirmode & ~S_ISGID,
+				GIT_MKDIR_VERIFY_DIR)) < 0)
+			return error;
+
+		/* create path #2 (if not the same as #4) */
+		if (!natural_wd &&
+			(error = git_futils_mkdir(
+				repo_path->ptr, NULL, dirmode & ~S_ISGID,
+				GIT_MKDIR_VERIFY_DIR | GIT_MKDIR_SKIP_LAST)) < 0)
+			return error;
 	}
 
 	if ((opts->flags & GIT_REPOSITORY_INIT_MKDIR) != 0 ||
 		(opts->flags & GIT_REPOSITORY_INIT_MKPATH) != 0 ||
 		has_dotgit)
 	{
-		uint32_t mkflag = GIT_MKDIR_CHMOD;
-		if ((opts->flags & GIT_REPOSITORY_INIT_MKPATH) != 0)
-			mkflag |= GIT_MKDIR_PATH;
-		error = git_futils_mkdir(repo_path->ptr, NULL, dirmode, mkflag);
+		/* create path #1 */
+		error = git_futils_mkdir(repo_path->ptr, NULL, dirmode,
+			GIT_MKDIR_VERIFY_DIR | ((dirmode & S_ISGID) ? GIT_MKDIR_CHMOD : 0));
 	}
 
-	if (wd_path->size > 0 &&
-		!natural_wd &&
-		((opts->flags & GIT_REPOSITORY_INIT_MKDIR) != 0 ||
-		 (opts->flags & GIT_REPOSITORY_INIT_MKPATH) != 0))
-		error = git_futils_mkdir(wd_path->ptr, NULL, dirmode & ~S_ISGID,
-			(opts->flags & GIT_REPOSITORY_INIT_MKPATH) ? GIT_MKDIR_PATH : 0);
-
 	/* prettify both directories now that they are created */
 
 	if (!error) {
diff --git a/tests-clar/refs/branches/remote.c b/tests-clar/refs/branches/remote.c
index 145c3182f..5272d1236 100644
--- a/tests-clar/refs/branches/remote.c
+++ b/tests-clar/refs/branches/remote.c
@@ -11,7 +11,7 @@ void test_refs_branches_remote__initialize(void)
 {
 	g_repo = cl_git_sandbox_init("testrepo");
 
-	expected_remote_name_length = strlen(expected_remote_name) + 1;
+	expected_remote_name_length = (int)strlen(expected_remote_name) + 1;
 }
 
 void test_refs_branches_remote__cleanup(void)
diff --git a/tests-clar/repo/init.c b/tests-clar/repo/init.c
index 97a5ff62a..e6f53083b 100644
--- a/tests-clar/repo/init.c
+++ b/tests-clar/repo/init.c
@@ -9,7 +9,7 @@ enum repo_mode {
 	BARE_REPOSITORY = 1
 };
 
-static git_repository *_repo;
+static git_repository *_repo = NULL;
 
 void test_repo_init__initialize(void)
 {
@@ -363,36 +363,166 @@ void test_repo_init__extended_1(void)
 	cl_fixture_cleanup("root");
 }
 
+static void assert_hooks_match(
+	const char *template_dir,
+	const char *repo_dir,
+	const char *hook_path,
+	bool core_filemode)
+{
+	git_buf expected = GIT_BUF_INIT;
+	git_buf actual = GIT_BUF_INIT;
+	struct stat expected_st, st;
+
+	cl_git_pass(git_buf_joinpath(&expected, template_dir, hook_path));
+	cl_git_pass(git_path_lstat(expected.ptr, &expected_st));
+
+	cl_git_pass(git_buf_joinpath(&actual, repo_dir, hook_path));
+	cl_git_pass(git_path_lstat(actual.ptr, &st));
+
+	cl_assert(expected_st.st_size == st.st_size);
+
+	if (!core_filemode) {
+		expected_st.st_mode = expected_st.st_mode & ~0111;
+		st.st_mode = st.st_mode & ~0111;
+	}
+
+	cl_assert_equal_i((int)expected_st.st_mode, (int)st.st_mode);
+
+	git_buf_free(&expected);
+	git_buf_free(&actual);
+}
+
+static void assert_mode_seems_okay(
+	const char *base, const char *path,
+	git_filemode_t expect_mode, bool expect_setgid, bool core_filemode)
+{
+	git_buf full = GIT_BUF_INIT;
+	struct stat st;
+
+	cl_git_pass(git_buf_joinpath(&full, base, path));
+	cl_git_pass(git_path_lstat(full.ptr, &st));
+	git_buf_free(&full);
+
+	if (!core_filemode) {
+		expect_mode = expect_mode & ~0111;
+		st.st_mode = st.st_mode & ~0111;
+		expect_setgid = false;
+	}
+
+	if (S_ISGID != 0) {
+		if (expect_setgid)
+			cl_assert((st.st_mode & S_ISGID) != 0);
+		else
+			cl_assert((st.st_mode & S_ISGID) == 0);
+	}
+
+	if ((expect_mode & 0111) != 0)
+		cl_assert((st.st_mode & 0111) != 0);
+	else
+		cl_assert((st.st_mode & 0111) == 0);
+
+	cl_assert((expect_mode & 0170000) == (st.st_mode & 0170000));
+}
+
 void test_repo_init__extended_with_template(void)
 {
 	git_buf expected = GIT_BUF_INIT;
 	git_buf actual = GIT_BUF_INIT;
-
 	git_repository_init_options opts = GIT_REPOSITORY_INIT_OPTIONS_INIT;
 
-	opts.flags = GIT_REPOSITORY_INIT_MKPATH | GIT_REPOSITORY_INIT_BARE | GIT_REPOSITORY_INIT_EXTERNAL_TEMPLATE;
+	cl_set_cleanup(&cleanup_repository, "templated.git");
+
+	opts.flags = GIT_REPOSITORY_INIT_MKPATH | GIT_REPOSITORY_INIT_BARE |
+		GIT_REPOSITORY_INIT_EXTERNAL_TEMPLATE;
 	opts.template_path = cl_fixture("template");
 
 	cl_git_pass(git_repository_init_ext(&_repo, "templated.git", &opts));
 
 	cl_assert(git_repository_is_bare(_repo));
+
 	cl_assert(!git__suffixcmp(git_repository_path(_repo), "/templated.git/"));
 
-	cl_assert(git_futils_readbuffer(&expected,cl_fixture("template/description")) == GIT_OK);
-	cl_assert(git_futils_readbuffer(&actual,"templated.git/description") == GIT_OK);
+	cl_git_pass(git_futils_readbuffer(
+		&expected, cl_fixture("template/description")));
+	cl_git_pass(git_futils_readbuffer(
+		&actual, "templated.git/description"));
 
-	cl_assert(!git_buf_cmp(&expected,&actual));
+	cl_assert_equal_s(expected.ptr, actual.ptr);
 
 	git_buf_free(&expected);
 	git_buf_free(&actual);
 
-	cleanup_repository("templated.git");
+	assert_hooks_match(
+		cl_fixture("template"), git_repository_path(_repo),
+		"hooks/update.sample", true);
+
+	assert_hooks_match(
+		cl_fixture("template"), git_repository_path(_repo),
+		"hooks/link.sample", true);
+}
+
+void test_repo_init__extended_with_template_and_shared_mode(void)
+{
+	git_buf expected = GIT_BUF_INIT;
+	git_buf actual = GIT_BUF_INIT;
+	git_repository_init_options opts = GIT_REPOSITORY_INIT_OPTIONS_INIT;
+	git_config *config;
+	int filemode = true;
+	const char *repo_path = NULL;
+
+	cl_set_cleanup(&cleanup_repository, "init_shared_from_tpl");
+
+	opts.flags = GIT_REPOSITORY_INIT_MKPATH |
+		GIT_REPOSITORY_INIT_EXTERNAL_TEMPLATE;
+	opts.template_path = cl_fixture("template");
+	opts.mode = GIT_REPOSITORY_INIT_SHARED_GROUP;
+
+	cl_git_pass(git_repository_init_ext(&_repo, "init_shared_from_tpl", &opts));
+
+	cl_assert(!git_repository_is_bare(_repo));
+	cl_assert(!git__suffixcmp(git_repository_path(_repo), "/init_shared_from_tpl/.git/"));
+
+	cl_git_pass(git_repository_config(&config, _repo));
+	cl_git_pass(git_config_get_bool(&filemode, config, "core.filemode"));
+	git_config_free(config);
+
+	cl_git_pass(git_futils_readbuffer(
+		&expected, cl_fixture("template/description")));
+	cl_git_pass(git_futils_readbuffer(
+		&actual, "init_shared_from_tpl/.git/description"));
+
+	cl_assert_equal_s(expected.ptr, actual.ptr);
+
+	git_buf_free(&expected);
+	git_buf_free(&actual);
+
+	repo_path = git_repository_path(_repo);
+	assert_mode_seems_okay(repo_path, "hooks",
+		GIT_FILEMODE_TREE | GIT_REPOSITORY_INIT_SHARED_GROUP, true, filemode);
+	assert_mode_seems_okay(repo_path, "info",
+		GIT_FILEMODE_TREE | GIT_REPOSITORY_INIT_SHARED_GROUP, true, filemode);
+	assert_mode_seems_okay(repo_path, "description",
+		GIT_FILEMODE_BLOB, false, filemode);
+
+	/* for a non-symlinked hook, it should have shared permissions now */
+	assert_hooks_match(
+		cl_fixture("template"), git_repository_path(_repo),
+		"hooks/update.sample", filemode);
+
+	/* for a symlinked hook, the permissions still should match the
+	 * source link, not the GIT_REPOSITORY_INIT_SHARED_GROUP value
+	 */
+	assert_hooks_match(
+		cl_fixture("template"), git_repository_path(_repo),
+		"hooks/link.sample", filemode);
 }
 
 void test_repo_init__can_reinit_an_initialized_repository(void)
 {
 	git_repository *reinit;
 
+	cl_set_cleanup(&cleanup_repository, "extended");
+
 	cl_git_pass(git_futils_mkdir("extended", NULL, 0775, 0));
 	cl_git_pass(git_repository_init(&_repo, "extended", false));
 
@@ -401,5 +531,4 @@ void test_repo_init__can_reinit_an_initialized_repository(void)
 	cl_assert_equal_s(git_repository_path(_repo), git_repository_path(reinit));
 
 	git_repository_free(reinit);
-	cleanup_repository("extended");
 }
diff --git a/tests-clar/resources/template/hooks/link.sample b/tests-clar/resources/template/hooks/link.sample
new file mode 120000
index 000000000..771acc43b
--- /dev/null
+++ b/tests-clar/resources/template/hooks/link.sample
@@ -0,0 +1 @@
+update.sample
\ No newline at end of file
diff --git a/tests-clar/resources/template/hooks/update.sample b/tests-clar/resources/template/hooks/update.sample
new file mode 100755
index 000000000..3b5f41202
--- /dev/null
+++ b/tests-clar/resources/template/hooks/update.sample
@@ -0,0 +1,9 @@
+#!/bin/sh
+#
+# A sample hook to make sure that the `git_repository_init_ext()` function
+# can correctly copy a hook over and set it up with the correct permissions.
+#
+# To enable a hook, you copy the file and remove the ".sample" suffix, but
+# in this case, we're just making sure it gets copied correctly.
+
+echo "$GIT_DIR"