What is a CLT?


What is a Community Land Trust?  
A community land trust (CLT) is a non-profit organization that provides permanently affordable homeownership opportunities to families of low and moderate income.  A CLT acquires land and legally separates ownership of the buildings (homes) from ownership of the land.  Homebuyers in CLT programs purchase only the house and enter into a long term lease agreement with the CLT for the land.  Removing the cost of the land from the transaction makes the home more affordable.  

How does a CLT home remain affordable in perpetuity for future low- or moderate income homebuyers?
When a CLT homeowner decides to sell a CLT home (which does not include the land), he/she is restricted by the land lease from selling the home to anyone other than a low to moderate income household for a price that is predetermined by the resale formula contained in the ground lease.   

What is the benefit of a CLT model of homeownership?
A community land trust provides access to homeownership for households who would otherwise not be able to afford a home through conventional channels.  In general, homeownership through a CLT provides long-term security, an opportunity to build assets through stable monthly payments,  and an opportunity to leave these benefits to their children. Specifically, homeownership through a CLT provides the following:

  • Affordability - The purchase price of CLT homes are lower than those found in the traditional market.
  • Mortgage - Federal tax deductions for mortgage interest.
  • Community - CLT homeowners automatically become members of the CLT.  They can vote, volunteer, or even sit on the Board.
  • Support - The 99-year ground lease establishes a long term relationship between the CLT and the homeowner.  CLT staff provide a wide variety of services and assistance to CLT homeowners. 
  • Stability - Homeownership provides stable housing costs and security from eviction.

What are the general terms of the Ground Lease?
The ground lease outlines the roles and responsibilities of both the CLT and the CLT homeowner.  The ground lease provides the homeowner with secure, long-term exclusive use of the land for a nominal lease fee.  The homeowner is provided full responsibility for the property and is required to maintain it.  The ground lease restricts who the home can be sold to and provides a resale formula that determines the sale price. The ground lease is renewable and can be passed on to heirs. 

Who pays property taxes on a CLT home?
The homeowner pays all the taxes associated with the property. 

What are the similarities and differences between CLT homeownership and conventional homeownership?

CLT Homeownership

Conventional Homeownership

Mortgage is with a bank

Mortgage is with a bank 

Accumulates limited equity

Accumulates full  equity

Purchase price is below market rate

Purchase price is market rate

Homeowner pays property taxes

Homeowner pays property taxes 

Homeowner can make improvements

Homeowner can make improvements 

Homeowner receives federal tax deductions for mortgage interest and property tax

Homeowner receives federal tax deductions for mortgage interest and property tax 

The CLT owns the land and leases it to the homeowner through a 99-year land lease

The Homeowner owns the land 

Homeowner must sell to a low to moderate homebuyer for a predetermined price

Homeowner is not limited to who they can sell their house to and for what price.   




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