HOMEOWNERSHIP
Community land trust homeownership is an innovation of Civil Rights leaders in the 1960s and 1970s to prevent displacement and create first-time homebuying opportunities for people shut out of ownership.
Following their example, the community land trust builds or acquires new homes, or remodels existing homes, and fundraises to subsidize the price of each home to what is affordable to a buyer who meets certain income requirements.
Homebuyers qualify to purchase the home with a traditional fixed-rate mortgage (or ITIN or Halal home financing) from a third-party lender, and accrue equity through a combination of principal reduction and home appreciation.
At the time of purchase, the community land trust retains title to the land under homes, where it is stewarded by the community for future generations.
In exchange for the opportunity to buy a home far below market rates, homeowners agree to a resale formula that controls the appreciation of the home. This formula allows them to earn a fair return of equity while at the same time passing on an affordable price to the next owner if/when they sell the home.
This formula and a monthly program fee are agreed upon in a 99-year, renewable lease or covenant between the community land trust and the homeowner. This same agreement requires that each homeowner use the home as their primary residence, pay taxes and insurance, and maintain the home in good repair.
Although our homeowners do not participate in the full market appreciation of their homes, they are protected from downward volatility in housing markets. The community land trust provides post-purchase support to homeowners, assisting in refinancing, repairs and resales.
As a result, owning a community land trust home is a safer first-time homebuying opportunity that puts buyers on the road to building household assets.