Need Free Money to be a Homeowner? Keep Reading...

There are many people around the country who would love to own their own home. Not to “flip,” not to sell in a few years for a profit and not for a secondary residence. They simply want to own their own piece of property in the city they love so that they can put down roots, raise a family and maybe even pass the home down to future generations. Unfortunately, in areas where real estate is always in demand, prices have not fallen much. In Seattle, for example, it is difficult to find a one-bedroom home for under $350,000. When you are one of the nearly 80% of the population in that area that makes around $40,000 a year, owning a home can seem like a pipe dream. How are you supposed to qualify for a loan, let alone have a mortgage that is affordable, when real estate is at such a premium? Do you have to leave the city and look to surrounding towns to find a home that is affordable? Why should you have to compromise your hopes and dreams for a place to call your own?

Luckily, there are programs in place that can help you make your dreams of owning a home, in the location you want, come true. One of the programs that you may not know about are Community Land Trusts (CLTs). There are certain qualifying factors that you have to reach but if you do meet them, the ability to own a home is a much more reasonable. Essentially a CLT eliminates the cost of the land from the price of the home. The qualifying buyer owns the house but the CLT owns the land. The land is then leased for a nominal fee to the homeowner. The homeowner agrees to live in the home as a permanent residence. So, for example, if a single-family home is being sold for $300,000 and the land is worth $150,000, then the buyer is only purchasing the remaining $150,000 of the cost. And if a few years down the line the owner wants to sell, they agree upfront that they would only sell the home for what is worth and the CLT would sell the land, most likely to another qualifying first-time home buyer. For someone who is planning on staying in their home long-term, the ability to afford a home in the area they want is possible with the aid of a CLT.

Community Land Trusts are forming in major cities across the country, such as Los Angeles and New York City. Even more typically “resort” towns like Key West and Jackson Hole are seeing CLTs forming. The idea behind the CLTs is that they foster a feeling of community which then translates to positive effects, such as lower crime rates and more well-maintained streets and aesthetics. If you are a first time home buyer with a moderate income, you may be able to afford to be a homeowner by working with a CLT. This might be your best bet at “free money” toward a home today.