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HOMEBUYER RESOURCES

The Basics of Community Land Trust (CLT) Home Ownership

These are the basics that you should know as you consider a community land trust home purchase.

How is a CLT home purchase like a traditional home purchase?

  • the buyer obtains a conventional mortgage with a bank (no FHA, no VA)

  • the homeowner gains equity in the home

  • the home can be inherited by the owner’s spouse or children (although income limits apply)

  • the homeowner pays property taxes

  • the homeowner can make improvements to the home and to the land (home value must stay within affordability limits)

How is a CLT home purchase different than a traditional home purchase?

  • The purchase price is drastically lower for a community land trust home.

  • Two Rivers CLT owns the land and the homeowner leases the land from the CLT for a small monthly fee (at present, $35).

  • Upon selling:

    • a CLT homeowner receives 100% of the money (principal, not interest, etc) that they have paid toward their mortgage, just like a traditional homeowner.

    • a CLT homeowner will receive 25% of the increase in value of their home.

    • a CLT homeowner will receive calculated compensation for capital improvements that they have done to their home (as long as they have followed Two Rivers’ CLT procedure at the time of the improvements).

What is it like to own a CLT home? Is the CLT my landlord?

No! The CLT is not your landlord. Your home is YOUR home. There is a document called the Ground Lease, which explains the relationship between the homeowner and the CLT. The Ground Lease details the rights - as well as the responsibilities -  of the homeowner. Each homebuyer that is completing the purchase process for a CLT home has a meeting with an attorney, independent of the CLT staff. The attorney will walk through the Ground Lease with the buyer to ensure that this relationship is understood. There is also a Homebuyer Orientation as part of the application process, and the Ground Lease is covered in that meeting as well.

Are You Eligible for a Community Land Trust Home? 

Find out if you are eligible to purchase a CLT home.

A successful CLT homebuyer must fit into two sets of income guidelines

  • The first income guideline:

    • The annual gross income for the whole household must be at or below the income limits for their household size (see chart below).

      • Income is counted for everyone that is 18 years of age and older in the home - gross, not net.​

      • Everyone who lives in the home at least 50% of the time is included in the household size.

2024 Income Limits

Two Rivers Community Land Trust homes are sold to buyers that qualify under income eligibility guidelines set by Minnesota Housing (MHFA) and Housing and Urban Development (HUD). If your gross monthly income is at or below the amounts in this chart, you may qualify for a home through our organization. Contact Two Rivers CLT for more information about the program or one of these homes. 


Household
Size


1


6


7


8


2


3


4


5


Income Limit


$68,500


$78,250


$88,050


$97,800


$105,650


$113,450


$121,300


$129,100

The second income guideline:

  • The applicant must be able to afford the mortgage payment for a home.

    • The mortgage payment must make up between 25-30% of a buyer's monthly gross income.​

      • Example: Using a home priced at $240,000, a monthly mortgage payment could be apx. $1,900 (based on several assumptions - interest rate, amount of down payment / down payment assistance, etc.).​​

      • An applicant that has an annual gross income of $80,000 would make apx. $6,700 monthly (gross).

      • That mortgage payment of $1,900 would be 29% of their gross monthly income. They would be within eligible income limits for that home.

To find out if you are within eligible income limits, you can submit a PreApplication.

We do not run your credit. The PreApplication is simply a tool we use to help you determine if your income fits the necessary guidelines for a community land trust home. If your income does fit, we will let you know that you are "initially eligible", which means that you may move on to our Full Application, where we work with you to find out more about your income, debt payments, and other factors that we are required to know.

At this point, we will also supply you with our Approved Lender List. These lenders have experience with community land trust (CLT) home purchases, and because of that, are who we work with exclusively.

If your income does not fit the eligibility criteria, we will let you know why. If there are things that you can do to make your finances better prepared and potentially eligible, we will tell you that as well.

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