City of Bridges is launching a new way for homebuyers to become a part of the Community Land Trust: the buyer-initiated down payment assistance program.
The program brings a down payment assistance grant to close the affordability gap for low and moderate income buyers who purchase homes on the market. At closing, the CLT takes ownership of the land and the new homeowner takes ownership of the structure. The homeowner signs a ground lease, giving them the right to occupy the land their home sits on and committing them to the CLT’s terms.
Homebuyer: finds a home they love on the market.
City of Bridges: brings a down payment assistance grant.
Home seller: gets the market rate price for their home.
This program provides income-qualified, mortgage-ready homebuyers with a flexible grant towards their down payment, closing costs, or home repairs. In exchange, the homebuyer signs a ground lease, and the home and homeowner become a part of the community land trust!
If the home on the market costs $150,000 and the buyer who wishes to purchase it can get financing for $120,000, City of Bridges can contribute $30,000.
That $30,000 investment will stay with the house – permanently. The home’s maximum resale price is restricted by the CLT ground lease, ensuring that a moderate income buyer in the future will be able to purchase the house.
Area Median Income (AMI) for short is a figure that is updated annually by the Department of Housing and Urban Development and it is indexed by family size. The Pittsburgh Area’s Area Median Income includes all of Allegheny, Butler, Beaver, Westmoreland, Washington, and Fayette Counties. The chart below shows exactly what AMI is for our area in 2019.
The target list price is $150,000, and the homes are subject to CLT approval. The CLT will look for issues related to structural integrity and key life safety items. If you have more questions about CLT eligibility, please give us a call!
This program can also be used to make home improvements. If the homebuyer can access the mortgage financing to buy the home but not the necessary improvements, the CLT can contribute flexible grant funding towards qualified repairs. The homebuyer will sign the CLT ground lease, and the house will become a part of the land trust.