Creating & Sharing Homeownership Opportunities
Empowering limited-income buyers to have successful homeownership journeys is MACLT's highest priority. Community Land Trusts are unique in their commitment to creating quality homeownership experiences while ensuring affordability continues from one MACLT homeowner to the next. Owning a home through a community land trust can be a life-changing experience for many families, but it isn't a fit for everyone. Here are a few distinct characteristics of CLT homeownership that will look different than the typical homeownership process:
Who We Serve |
Community land trusts are designed to make homeownership possible for those who would not otherwise have the opportunity to own their own home. While specific requirements vary depending on the organization, CLTs typically serve only limited income households. Minot Area CLT serves predominantly households earning under 80% area median income, with occasional opportunities available up to 120% of area median income.
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Creating Affordability
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Why are community land trust homes less expensive than market-rate homes? It isn't because they are lower quality or less desirable. Our promise to continue affordability of a home from one owner to the next creates opportunities for lower priced homes. MACLT's status as a 501(c)3 organization and commitment to long-term affordability open up access to subsidy resources through the State of North Dakota and the Federal Department of Housing & Urban Development that provide a substantial price reduction when a home is initially added to the CLT's portfolio. Each homeowner plays a critical role in ensuring this continuation by agreeing to accept a reduced portion of appreciation at resale.
Because MACLT maintains ownership of the land on which a CLT-home sits, a ground lease is put in place on each community land trust home. This ground lease makes the obligations of the CLT and the homeowner clear. The most important section of the ground lease is the resale formula. Like all CLTs, Minot Area Community Land Trust utilizes a shared-equity resale formula to ensure affordability of the home can be passed from one owner to the next. It is this resale formula that keeps MACLT homes affordable without needing any additional subsidy for decades. Recognizing the ebbs and flows of the Minot market, MACLT's Board of Directors elected to utilize a Flat Rate resale formula, which guarantees the owner a specific return of 2.5% per year for each full year they live in the home. This graphic below shoes what the resale price would be after each year of ownership on a home that was originally priced at $155,000. While the return on investment is lower for most CLT homeowners than market-rate homeowners, it is important to remember that most CLT buyers would not have experienced homeownership without support from the CLT. Accordingly, their return on investment should be compared to their cost of renting rather than the potential return of owning a market-rate home. Community land trusts are proud to be known as the developer that doesn't go away. Because of our ongoing relationship through land ownership and the ground lease, MACLT staff will be available to provide stewardship to CLT homeowners during their CLT journey and as they consider market-rate homeownership. MACLT staff will also play a critical role in the resale process, ensuring the next CLT-qualified buyer is ready to purchase. For more information on the uniqueness of CLT homeownership, feel free to reach out to us via our Contact Us page. |