When buying a home through the Home Trust, homebuyers agree, through a commitment agreement, to adhere to the CLT model of homeownership. Homebuyers agree to take proper care of their property, pay HOA fees and shared neighborhood costs, and sell their home through the Home Trust.
What’s the difference between buying a Home Trust home and a market rate home?
Home Trust homes are permanently affordable. They will never be sold on the open market. When purchasing a Home Trust home, buyers agree to sell their house through the Home Trust, limiting the sale price set through a resale formula. We work with a resale formula, that increases the price of your home 1.5% per year, compounding annually.
The Home Trust receives government grants and community donations to lower the initial sale price of our homes, making them affordable to homebuyers with lower incomes.
In exchange for this community and government support, our homeowners forfeit traditional profits that may come from owning a market rate home. Home Trust homes provide stability; not a nest egg. Home Trust Homes allow neighbors to build wealth in other ways: when someone has a stable, affordable home, they can invest in education, community, and make financial investments outside their home.
The Home Trust ensures permanent affordability in two ways, with both written into the contracts and deeds of sale:
1) Every homeowner agrees to only sell their home to another income-qualifying family and
2) Every homeowner agrees to limit their home’s annual appreciation to 1.5% per year, compounding annually.
While someone who stays in their Home Trust home over decades is able to build equity, and the agreed upon percentage increase in the sale price of their property per year can be substantial, maintaining a home costs money, and often some of the profit homeowners might gain goes back into needed repairs when selling.
The resale restriction on every Home Trust house is the only way the homes stay affordable forever.
Additionally, the Home Trust CLT model requires that homeowners participate in the care and maintenance of their neighborhoods. Homeowners lease the land on which their houses are located from the San Juan Community Home Trust, and agree to manage common areas through their Homeowners Associations (HOAs). Thus, Home Trust Homeowners are agreeing to a time commitment, and level of participation, that allows neighborhoods to run smoothly.