Land Trust homeowners include families, children, grandparents, couples, and singles. They are social workers, bus drivers, teachers, students, office workers, business owners, stay-at-home moms, artists, musicians, and much more.
Some of our lowest income homebuyers would not have been able to buy a home except through the Land Trust program. Other Land Trust homeowners could have afforded to buy a home on the open market, but most likely they would have qualified for a home in need of significant repairs which would have been too expensive for them to complete. The Land Trust program helps these families purchase a much higher quality home than they would have otherwise been able to afford.
You may choose to work with any area realtor to purchase a Land Trust home or you may request a list of realtors that have worked with the CLCLT in the past.
Land Trust homeowners pay all the taxes and assessments associated with their property. As with all homeowners, the interest portion of their mortgage payment is tax deductible. If you itemize your federal income taxes, the property taxes that are paid also are tax deductible.
The CLCLT provides an affordability grant at closing. At that time the CLCLT takes title to the land, while the homeowner takes title the home. Homeowners have exclusive rights to the land under their home and an expectation of privacy.
When a homeowner wants to sell his or her home, a formula is used to determine the sale price.
Essentially, in exchange for buying a home at an affordable price, the homeowner agrees to sell the home at an affordable price. This preserves the affordability for the next lower-income family who buys the home.
Independent appraisals of the home are to be obtained at the time of purchase and in preparation for the sale. The resale formula will be used to determine the sale price as in the following example:
|Initial appraised value of property||$120,000|
|Initial purchase of home||$90,000|
|Appraised value of property at resale||$160,000|
|Increase in value of property (“appreciation”)||$40,000|
|Seller’s share of appreciation (25%)||$10,000|
|Resale Price of Home||$100,000|
The resale price is the initial price ($90,000) plus 25 percent of the increase in value (.25 x $40,000=$10,000), which equals $100,000. The seller receives all of the equity that they have gained from paying down their mortgage, plus $10,000 from appreciation.