Permanent Affordability
“I like the Land Trust because it really is a way to enable responsible people to own a home they otherwise would not be able to. We were able to buy a house about five years earlier than we thought--five years of equity, stability, and credit!”
--a Land Trust homeowner
Lower-income families wanting to buy a home face many challenges. Home prices in the Cleveland area have grown much faster than incomes in recent years. Those lower-income families who can purchase a house are frequently forced to choose from the region's older, deteriorating housing stock. They also must often resort to a subprime mortgage with added fees and hidden costs that places the low-income homeowner at great risk for foreclosure.
The result is financial uncertainty for these families, as their attempts to accumulate equity in a home are frustrated. Neighborhoods are also destabilized as people are forced to move too often without becoming stakeholders in the community. Municipalities pay a cost for the uncertainties of the lower-income housing market, too. According to a report prepared for the Homeowner Preservation Foundation, each foreclosure can drain over $10,000 from city resources. Foreclosures force home prices in the surrounding neighborhood down, as well, which cuts into property tax revenues.
The Land Trust helps low- and moderate-income people achieve secure homeownership, providing stability for the families who buy our homes and the neighborhoods where they choose to live.
- We partner with our clients to help them qualify for a sound mortgage. We work closely with them to identify and repair problems with their credit, to increase savings, to erase debt, and to remove other barriers that would prevent them from getting a good mortgage.
- Once a client becomes mortgage-qualified, they can purchase one of our quality land trust homes at a substantially reduced price.
- CCLT supports our homeowners after they buy a land trust home, as well. We have an aggressive foreclosure prevention program helping them avoid the worst consequences of unexpected financial hardship. We also provide information about routine upkeep and how to maintain a home and its value.
- Finally, CCLT's homes are affordable not only for the first buyer, but for subsequent buyers, too.
Our clients buy the home with a traditional bank mortgage, but they lease the land on which the house sits from CCLT. They receive a 99 year renewable lease to the land, which provides secure access to the property. When they sell, they agree to allow a portion of the increase in the value of the home to stay with the home in order to bring the sale price down for the next moderate-income buyer.
The Land Trust's program for securing affordability provides a return on the investment of both the homeowner and the community, allowing the homeowner to accumulate significant equity while the original affordability subsidy benefits successive buyers.
Because the homes we develop are permanently affordable, the Land Trust represents a particularly efficient investment of public and charitable resources, providing lasting benefit to lower-income families, to neighborhoods, and to the region.
