How do I refinance?

The Ground Lease is where homeowners can find information about refinancing. Section 8.3 of the Ground Lease describes the process for refinancing. It states “If, at any time subsequent to the purchase of the Home and signing of the Lease, the Homeowner seeks a loan that is to be secured by a mortgage on the Home (to refinance an existing Permitted Mortgage or to finance home repairs or for any other purpose), the Homeowner must inform CLT, in writing, of the proposed terms and conditions of such mortgage loan at least 30 days prior to the expected closing of the loan.”
The information to be provided to the CLT must include:

1. The name of the proposed lender;
2. Homeowner’s reason for requesting the loan;
3. The principal amount of the proposed loan and the total mortgage debt that will result from the combination of the loan and existing mortgage debt, if any;
4. Expected closing costs;
5. The rate of interest;
6. The repayment schedule; and
7. A copy of the appraisal commissioned in connection with the loan request.

What is maintenance vs capital improvements?

Maintenance is required to be done by the homeowner and this is stipulated in the Ground Lease. A capital improvement, however, is an optional improvement to the home and pre-approval is required for a capital improvement, as spelled out in the Ground Lease. Another important distinction is that a capital improvement will add value to the home. Some examples of capital improvements include a garage addition, a kitchen remodel, a bathroom remodel, a build-out or conversion of a basement or attic which adds to the living space or a small addition to the existing home. See the discussion in the question #3 for how to get approval for a capital improvement. Maintenance is the responsibility of the home owner. Section 7.5 of the Ground Lease discusses maintenance and repairs. In addition to being responsible for services such as the utilities that serve the property, the homeowner is to make all necessary repairs and replacements while owning the home (repairs that keep the home functional, operational, code related similar to how the home was provided at purchase). If the homeowner does not maintain the home, the owner may be required to make repairs at the time of sale as spelled out in section 10.13 of the Ground Lease.

What is the process for approval of a capital improvement, also known as a Qualified Capital Improvement Plan?

Written approval needs to be obtained from the CLT for any capital improvements. The reason is twofold. First, the land trust wants to see the home remain permanently affordable so will view all requests for capital improvements in terms of the value added to the home and whether this additional value makes the home unaffordable in the future. Second, all costs for any capital improvement projects are fully paid by the homeowner, with the homeowners own funds. Therefore the additional VALUE added to the property as a result of the improvement will be subtracted from the shared equity at the time of resale. Equity is the difference in value from the time of purchase to the time of resale. The homeowners share of this appreciation is 25% and any value related to the capital improvements done by the homeowner would be subtracted from the shared equity which means a larger equity portion for the homeowner. The Ground Lease specifically states, “For any construction requiring CLT’s prior written consent, Homeowner shall submit a written request to the CLT. Such request shall include:

1. A written statement of the reasons for undertaking the construction;
2. A set of drawings (floor plan and elevations) showing the dimensions of the proposed construction;
3. A list of the necessary materials, with quantities needed;
4. A statement of who will do the work;

What home improvement resources are available?

Two Rivers strives to maintain information that is relevant and useful for our homeowners. Examples of this are: classes on home maintenance, newsletters, articles and news on our website and Facebook posts. If you are not finding the answer to your particular need, contact Sherry Timmermann Goodpaster for more information on your specific concerns.

How do I find a reliable contractor?

Two Rivers, in addition to providing permanently affordable homes to income-qualified households, also provides ongoing support, as needed, for homeowners. One resource we provide to homeowners is a list of reputable and fair contractors. It is not an exhaustive list but a list of contractors with whom Two Rivers has had past experience. Contact Sherry for more information.

I’d like to sell. What is the process for me to sell my land trust home?

Section 10 of the Ground Lease discusses selling your home. The first step in the process is to notify Two Rivers in writing of your intention to sell the property. Then Two Rivers will commission an appraisal to determine the current value of the home. This information is used to calculate the resale price. Two Rivers will pay for only one appraisal for this purpose over the course of ownership. Once the appraisal is in, the resale price will be calculated and the property is marketed by the owner. Interested applicants complete a pre-application through Two Rivers. Two Rivers handles all the qualification of prospective buyers and notifies the owner when there is an approved buyer who plans to submit an offer on the home.

How does the resale formula work? How is my equity determined?

The appraisal, which establishes the current value of the home with the land, is compared to the original appraised value of the home and the land at the time of purchase. The difference between the two appraisals is the appreciation. The homeowner equity (25% of this appreciation) is added to the original purchase price to establish the new selling price. Here is an example how the resale formula works:
Appraised value of home and land at time homeowner wants to sell: $ 176,000
Appraised value of home and land at time of original purchase: $ 160,000 Value difference = appreciation: $ 16,000
Home owner equity (25% of the appreciation): $ 4,000 Price homeowner paid for home (without land): $ 125,000
Plus homeowner share of the appreciation: $ 4,000 Equals new sale price: $ 129,000

I’d like to review my cost of homeowners insurance. Is there a list of reputable insurance agents?

Two Rivers, in addition to providing permanently affordable homes to income-qualified households, also provides ongoing support, as needed, for homeowners. One way we support owners is with a list of reputable and fair insurance agents in the area. Contact Sherry for more information.

What is the process for having my home transfer to my children (heirs) at the time of my death?

As stated in the Ground Lease, Section 10.3: “If Homeowner dies (or if the last surviving co-owner of the Home dies), the executor or personal representative of Homeowner’s estate shall notify CLT within ninety (90) days of the date of the death. Upon receiving such notice CLT shall consent to a transfer of the Home and Homeowner’s rights to the Leased Land to one or more of the possible heirs of Homeowner listed below as “a,” “b,” or “c,” provided that a Letter of Agreement (as described in Article 1 of the Ground Lease) are submitted to CLT to be attached to the Lease when it is transferred to the heirs.
a) the spouse of the Homeowner; or
b) the child or children of the Homeowner; or
c) member(s) of the Homeowner’s household who have resided in the Home for at least one year immediately prior to Homeowner’s death.
Article 1 of the Ground lease addresses the Homeowners Letter of Agreement and the Attorney’s Letter Acknowledgement and pertains to the Homeowner’s understanding and acceptance of the Lease.”

What should I do if I am experiencing difficulty with my house payment?

Two Rivers strives to maintain helpful resources for CLT owners, and financial counseling is one of those resources. Please let Two Rivers know right away if there is something happening in your life and you are having trouble making your house payments, if you are struggling with your finances, or if the homeowner needs to make payment arrangements on the lease payments. Two Rivers wants to be a partner and advocate on your behalf. Below is a list of financial/foreclosure counselors who are free, confidential, trained and professional advisors. Two Rivers also has other resources depending on your need. Homeownership Center, 651-659-9336, http://www.hocmn.org/foreclosure-prevention/ Neighborhood Development Alliance (NeDa), 651-292-0103, https://nedahome.org/ Neighborworks, 651-292-8710, https://nwhomepartners.org/keep-your-home/

In a recent storm, a large tree came down in the yard. It is expensive to have removed. Whose responsibility is it for removal since Two Rivers owns the land?

The first thing any homeowner should do when there is storm damage is to contact your homeowners insurance agent to see if removal is covered under this policy. If it is not, then contact Sherry as she may have other ideas or options depending on the nature of the damage.