City of Bridges has launched another way for homebuyers to become a part of the Community Land Trust: the Buyer-Initiated down payment assistance program.
The program offers 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 becomes the owner of the land and the new homeowner becomes the owner of the home. The homeowner signs the standard CBCLT ground lease, giving them the right to occupy the land their home sits on and committing them to the CBCLT’s terms in order to make sure the home remains permanently affordable.
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!
City of Bridges CLT can make a grant of up to $35,000 to pay for downpayment, closing costs, and/or repairs and updates to a home for income-qualified homebuyers. The size of the grant is determined based on each individual’s need for downpayment support as well as the repairs and updates the specific home needs.
For example, if a home is listed for $150,000 but a buyer is pre-qualified for a $130,000 mortgage, CBCLT will provide $20,000 of downpayment support so that the buyer can afford the home.
The maximum sale price for a Buyer Initiated home is $165,000.
Through the CLT model, the $35,000 grant will stay with the house – permanently. The home’s maximum resale price is restricted by the CLT ground lease, ensuring that the new homeowner can build equity while also making sure 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 2021.
The target list price is $165,000, 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.