Buying and owning a CLT home

Frequently asked questions · 11 questions

Buying and owning a CLT home

What it means to buy and own a home from a community land trust: who can buy, the ground lease, mortgages, taxes, reselling, inheritance, and whether it is a good choice.

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Who can buy a home from a community land trust?

Each CLT sets its own rules, usually guided by its funders. Most U.S. CLT homes are for households earning less than 80 percent of the area median income, and many CLTs serve households well below that. Buyers usually need to qualify for a mortgage, live in the home as their main residence and complete a homebuyer education class.

Outside the United States the rules differ. Some CLTs give priority to people with a local connection, such as residents of a village or a neighborhood at risk of displacement. The best way to find out is to contact a CLT near you. Our CLT Map and Directory lists them.

Under Fannie Mae’s rules, the CLT’s own requirements come on top of the lender’s: buyers must meet the CLT’s eligibility criteria, which are usually based on income compared with the area median, and some programs also require buyers to be first-time homebuyers. Income limits vary widely. The Lopez Community Land Trust set out to serve people earning less than 60 percent of the median; some city-supported programs serve households up to 120 percent. Most CLTs also ask buyers to show that they understand the ground lease and resale restrictions, which the model lease does through a letter of agreement and a letter from the buyer’s attorney.

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How do I find a CLT home for sale near me?

Start with the CLT Map and Directory, which shows community land trusts by location with links to their websites. Most CLTs post available homes, waiting lists and eligibility rules on their own sites, and many hold information sessions for buyers.

The CLT Center does not sell homes or keep listings. Contact the CLT that serves the area where you want to live.

Most CLTs keep a list of people interested in buying and contact them as homes become available, either newly built homes or resales from current owners. Some have waiting lists, and many require buyers to attend an orientation and a homebuyer education class before they can buy. A few run “buyer-initiated” programs, in which you shop for an existing house on the open market within a price limit, and the CLT uses public funds to buy the land under it and lower your price. The Houston CLT’s Homebuyer Choice program brought 167 homes into the CLT this way between 2021 and 2023.

When you contact a CLT, it helps to ask: Who is eligible, and what are the income limits? Is there a waiting list? What homes are available, and at what prices? What is the monthly lease fee? How does the resale formula work? And which lenders have made loans on its homes?

Sources

  • CLT Center, CLT Map and Directory (last updated November 2024).
  • John Emmeus Davis and Kristin King-Ries, Preserving Affordable Homeownership (Lincoln Institute of Land Policy, 2024), chapter 4.
  • Kirby White, ed., The CLT Technical Manual (2011), chapter 11-A, the model ground lease.

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Do CLT homeowners really own their homes?

Yes. In the classic model, a CLT homeowner holds a deed to the house, can live there as long as they like, can improve it, and can leave it to their heirs. What they do not own is the land, which they lease from the CLT, usually for 99 years and renewable.

This differs from owning both house and land outright (“fee simple”). The trade-off is that a CLT homeowner pays less to buy the home and agrees to sell it later at an affordable price, so they gain less from rising prices than an owner on the open market would. For a household that could not otherwise buy at all, many find this a good bargain.

Sources

  • CLT Center, What Is a Community Land Trust?
  • Kirby White, ed., The CLT Technical Manual (National Community Land Trust Network, 2011). See Manuals and Guides.
  • John Emmeus Davis and Alice Stokes, Lands in Trust, Homes That Last: A Performance Evaluation of the Champlain Housing Trust (Champlain Housing Trust, 2009).

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What is a ground lease, and why does it run for 99 years?

A ground lease is the contract between the CLT, which owns the land, and the homeowner, who owns the house. It gives the homeowner the right to use the land and sets out both sides’ responsibilities, including the rules for reselling the home.

Most CLT ground leases run for 99 years, renewable, and can be passed on to heirs. The long term gives homeowners and their lenders the security they need, while keeping the community’s ownership of the land. It also makes the lease’s affordability restrictions easier to enforce in court than a permanent deed restriction in many places. See “Ground leases or deed restrictions: which is better?” under How CLTs keep homes affordable.

Most U.S. CLTs use ground leases based on the model lease developed by the National Community Land Trust Network (now Grounded Solutions Network) or the earlier Institute for Community Economics lease. Fannie Mae requires a lease based on one of these models before it will buy a mortgage on a CLT home. The model lease is in the CLT Technical Manual.

In the United States, most CLT leases are based on the 2011 CLT Network Model Ground Lease, published with a detailed commentary in The CLT Technical Manual and now maintained by Grounded Solutions Network, which recommends it as the foundation for any CLT’s lease. It matters for buyers because Fannie Mae and Freddie Mac will buy mortgages on CLT homes only when the lease is based on this model (or the older Institute for Community Economics model). The model is written in plain language, with section headings that state each rule, such as “Term of lease is 99 years.”

Its main terms: the lease runs 99 years and can be renewed; the home is to be used as the owner’s residence; the owner pays a monthly lease fee and the property taxes; the owner owns the house and other improvements; the home can be mortgaged only with the CLT’s permission, which protects buyers from risky loans; the CLT has the right to buy the home, or to find the next buyer, at the price set by the resale formula; and the homeowner automatically becomes a voting member of the CLT. The transfer article comes in four versions, depending on whether the owner may choose the next buyer and which kind of resale formula the CLT uses. Programs that use federal HOME funds add a HOME rider so the lease meets that program’s rules.

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Do homeowners pay a monthly fee to the CLT?

Usually, yes. Most CLT homeowners pay a monthly ground lease fee, which helps pay for the CLT’s work in looking after its homes and owners. The fee is generally modest, and it is set so that it does not make the home unaffordable. Some CLTs add an amount for major repairs.

Many CLTs also invite homeowners to become members, sometimes for a small annual fee, which gives them a vote in electing the board.

Under the model ground lease, the monthly fee has two parts: a land use fee, paid for the right to use the land, and a repair reserve fee, which the CLT holds to keep the home in good condition over the long term. Each CLT sets its own amounts.

Sources

  • John Emmeus Davis and Kristin King-Ries, Preserving Affordable Homeownership: Municipal Partnerships with Community Land Trusts (Lincoln Institute of Land Policy, 2024). See Joint Publications.
  • John Emmeus Davis and Alice Stokes, Lands in Trust, Homes That Last: A Performance Evaluation of the Champlain Housing Trust (Champlain Housing Trust, 2009).
  • Kirby White, ed., The CLT Technical Manual (National Community Land Trust Network, 2011), chapters 11-A and 11-B (the model lease and commentary). See Manuals and Guides.

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Can I get a mortgage on a CLT home?

Yes. Many banks and credit unions lend on CLT homes, and Fannie Mae and Freddie Mac both have mortgage products designed for them. Fannie Mae, for example, buys loans on one- and two-unit CLT homes, including manufactured homes, through most of its programs, including HomeReady, with no extra cost to the borrower. Because the loan is measured against the home’s appraised value rather than its lower, affordable price, many CLT buyers do not need mortgage insurance.

There are a few conditions. The CLT’s ground lease must be based on one of the standard model leases used by CLTs in the United States, and the lender adds a CLT ground lease rider. Buyers also need to meet the CLT’s own eligibility rules. Refinancing is allowed with the CLT’s approval. It is easiest to work with a lender the CLT already knows. See Fannie Mae’s Community Land Trust Frequently Asked Questions (2026).

Because CLTs stay involved after the sale, CLT loans have performed well. During the 2008 to 2009 foreclosure crisis, conventional mortgages were about eight times more likely than CLT mortgages to be in foreclosure (see “What happens if a homeowner falls behind on the mortgage?”).

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Who pays the property taxes?

It depends on local law. In most places the homeowner pays property tax on the house, and either the CLT or the homeowner pays tax on the land, usually through the lease fee. Many U.S. states and cities now assess CLT homes at their restricted resale price rather than their market value, which keeps taxes in line with what the owner can actually sell for, but practice varies.

The Lincoln Institute report Preserving Affordable Homeownership, listed under Joint Publications, discusses fair taxation of CLT homes. Our US State Law Database lists state laws that apply to CLTs.

The CLT Technical Manual sets out the issue. CLTs do not ask for their homes to be exempt from property tax; their homeowners use local services like everyone else, and the model lease makes the homeowner responsible for all property taxes on the home and land. What CLTs ask is that the tax be based on what the home can actually be sold for. Most argue that its value for tax purposes should equal the maximum resale price allowed by the ground lease, which at first sale is the subsidized purchase price, sometimes $50,000 or more below the home’s unrestricted value. A higher assessment can wipe out a lower-income household’s affordability, or require a larger subsidy to restore it.

Practice varies from state to state and even county to county, and it changes as courts, state agencies and legislatures take up the question. Several states have passed laws directing assessors to take resale restrictions into account. A CLT starting out should meet early with its local assessor.

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Can I sell my home, and how much can I sell it for?

Yes, you can sell. The ground lease sets a resale formula that decides the price, so that the home stays affordable for the next buyer. Formulas vary. Some add a fixed percentage each year; others follow changes in area income or the market value of the home, and owners are usually credited for major improvements.

The CLT usually has the right to buy the home back or to find the next eligible buyer. Sellers walk away with the money they put in, the mortgage principal they have paid off and a share of any increase in value. In practice, many CLT owners use that equity to buy a home on the open market.

When an owner decides to sell, the CLT usually has a set period, often four to six months, to buy the home or find an eligible buyer, and it often handles marketing and closing without a commission. At the Champlain Housing Trust, most resales were completed within that period, though they took longer when the market slowed.

Sources

  • John Emmeus Davis and Alice Stokes, Lands in Trust, Homes That Last: A Performance Evaluation of the Champlain Housing Trust (Champlain Housing Trust, 2009).
  • Kirby White, ed., The CLT Technical Manual (National Community Land Trust Network, 2011). See Manuals and Guides.

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Can I leave my home to my children?

Yes. CLT ground leases are generally inheritable. If your heirs meet the CLT’s eligibility rules, they can usually move in and take over the lease. If they do not want to live there, or are not eligible, the home is sold under the resale formula and the proceeds go to your estate.

The details are in each CLT’s lease, so ask the CLT how it handles inheritance.

The model ground lease used by most U.S. CLTs spells this out. When a homeowner dies, the estate notifies the CLT within 90 days, and the CLT must consent to transfer the home to the owner’s spouse, children, or members of the household who lived in the home for at least the year before the death, provided they sign the same letters of agreement as any new owner. Other heirs may inherit the home only if they meet the CLT’s income requirements; otherwise the home is sold under the resale formula and the proceeds go to the estate. The letter every buyer signs puts it plainly: “I understand that I can leave my home to my child or children or other members of my household.”

Sources

  • Kirby White, ed., The CLT Technical Manual (National Community Land Trust Network, 2011). See Manuals and Guides.
  • Kirby White, ed., The CLT Technical Manual (2011), chapter 11-A, section 10.3 and Exhibit A (homeowner’s letter of agreement).

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What happens if a homeowner falls behind on the mortgage?

A CLT steps in early. The ground lease requires the homeowner to let the CLT know if they fall behind, and it gives the CLT the right to cure the default or to buy the home before a lender forecloses. Many CLTs also counsel owners, help them find assistance or negotiate with lenders, so that the family can stay or sell on its own terms and the home stays in the CLT.

It works. A national study during the foreclosure crisis found that at the end of 2009, only 0.56 percent of CLT mortgages were in foreclosure, compared with 3.31 percent of prime loans and 15.58 percent of subprime loans. See “Outperforming the Market” by Emily Thaden and Greg Rosenberg in Land Lines, the Lincoln Institute’s magazine (October 2010).

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Is buying a CLT home a good idea?

For many households it is. A CLT home is often the only way to own a home in a costly market. Monthly costs are lower, owners build some wealth through their equity and repayments, they are less likely to lose the home, and the CLT is there if problems come up.

It is a trade-off. You will sell at an affordable price, not the market price, so you will gain less from rising prices than the owner of an unrestricted home. You also share some decisions with the CLT, such as subletting or refinancing. If you are weighing a CLT home, ask the CLT how its resale formula works and what earlier owners have earned when they sold.

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