What’s a community land trust?

Posted on by Ed Kromer. This entry was posted in Financially Fit, Life Events and Changes. Bookmark the permalink.

Community land trusts (CLTs) are nonprofit organizations focused on creating permanently affordable housing. The land trust shares in the ownership of the home — they own the land, while you own the home. This may result in lower housing costs.

The Whole U’s partners at HomeStreet Bank answer some frequently asked questions about community land trusts.

Are there resale restrictions for CLTs?

Yes, the CLT ground lease will include restrictions on future buyers, ensuring that they meet CLT qualifying and ownership requirements. The CLT will also help set the sales price, where equity and appreciation is considered for affordability and not necessarily indicative of current open market conditions.

What are the typical eligibility requirements for a borrower looking to purchase a CLT property?

CLTs generally have additional qualifying requirements that must be satisfied. Typically, the criteria are based on the borrower’s household income. And, for many programs, the borrower must also be a first-time home buyer.

If the borrower is in default, does the CLT have the right of first refusal to purchase the property?

In case of a loan default, the Land Trust may have rights to the home. A CLT representative and your loan officer will discuss all legal details with you before you purchase.

Want to learn more? Contact HomeStreet today!

To understand the availability and requirements of the community land trusts in your community, it may be helpful to talk to a loan officer. The HomeStreet Bank Affinity loan officers are knowledgeable on the specifics to CLTs and can help you make an informed decision.

Local community land trusts