Commonly asked questions about the CLT
WHAT IS A HOUSING LAND TRUST AND HOW DOES IT WORK?
- Homeowners own the home and all improvements
- The Land Trust owns and holds title to the land
- The Land Trust leases the land to homeowners for a nominal fee through a 99-year ground lease
- Ground Lease and Deed are recorded, enforceable, legally-binding
The benefits of Living in a Land Trust Home are:
- Long-term security of homeownership
- Fixed housing expense
- Tax deductions
- Equity accumulation
The benefits of donating dollars or land to a Land Trust are:
- Subsidy retention: Each dollar donated stays in the home in perpetuity. Your legacy will remain in permanence.
- Tax Write off: As a California 501(c)3 organization your donations are 100% tax deductible
WHY DO WE NEED THE LAND TRUST?
When incomes do not rise as fast as housing prices, many people cannot afford to buy a market-rate house. The Land Trust is a tool to help low and moderate income people with steady incomes and good credit buy a home.
WILL BANKS AND OTHER FINANCIAL INSTITUTIONS MAKE LOANS FOR HOMES ON LEASED LAND?
Yes. Most of the largest banks in the country are regularly making Land Trust home loans. We can also recommend a local lender who is well versed with the program and with all documents needed to secure loan approval.
HOW DOES A LAND TRUST MAKE HOMEOWNERSHIP AFFORDABLE?
The Land Trust owns the land and does not pass that cost to the homeowner. Taking the price of the land out of the equation makes the home more affordable. In return, the home is sold to the next family at a price they too can afford.