CSBG Resource Bank: Community Land Trusts Help Homeowners Keep Their Homes

— Ken Ackerman, Virtual CAP Project Manager, Virginia Community Action Partnership —

Bringing down the cost of housing is one of the best ways to help low-to-moderate income families gain a foothold on economic security.  A Community Land Trust (CLT) is a model that can be used to reduce the initial housing cost to prospective buyers, while also helping maintain affordability of the house when it’s sold.  As described by the National Community Land Trust Network:

The purposes of a Community Land Trust are to provide access to land and housing to people who are otherwise denied access; to increase long-term community control of neighborhood resources; to empower residents through involvement and participation in the organization; and to preserve the affordability of housing permanently. Though the program specifics vary among different CLTs, the basic model is the same. CLTs offer a balanced approach to ownership: the nonprofit trust owns the land and leases it for a nominal fee to individuals who own the buildings on the land. As the home is truly their own, it provides the homeowners with the same permanence and security as a conventional buyer, and they can use the land in the same way as any other homeowner. 1

CLTs and the Foreclosure Crisis

In November 2011, the Center for Responsible Lending reported that 6.4 percent of mortgages made between 2004 and 2008 ended in foreclosure, and an additional 8.3 percent were at immediate, serious risk.2  Yet, CLTs helped stem the tide of this trend.

A survey of foreclosures at the end of the 4th quarter of 2009 provides evidence that conventional homeowners were much more likely to be in the process of foreclosure than CLT homeowners.3  The study was conducted through a partnership between the National CLT Network and the Community Research & Action Program at Vanderbilt University.  Findings were based on results from surveys conducted at the end of 2009 involving 2,173 mortgage holders in 42 CLTs across 22 states.  Research was designed so that several measures from the survey could be compared to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.  This information is available through the CSBG T/TA Resource Bank in the report Outperforming the Market: Making Sense of the Low Rates of Delinquencies and Foreclosures in Community Land Trusts.

Results from the survey found that conventional homeowners were 8 times more likely to be in the process of foreclosure than CLT homeowners.  When the percentages of “seriously delinquent” mortgages for the end of 2009 were calculated (which includes delinquencies of 90 days or more and those in the foreclosure process), MBA percentages ranged from 5.4% to 30.6% (depending on loan types) compared to only 1.6% in CLTs.

CAAs Launch CLTs

Community Action Agencies have been leaders in providing safe, decent and affordable housing across the U.S.  Two examples of CAAs involved with Community Land Trusts are:

Pre- and post-purchase counseling are essential aspects of homebuyer education, while proper stewardship is critically important to preserve and protect the asset of a home.  CAAs with the capacity to provide these and other “wrap-around” support services may want to explore what it takes to start a Community Land Trust.4


1 National Community Land Trust Network, What Are Community Land Trusts?, accessed February 12, 2013

2 Center for Responsible Lending, Lost Ground, 2011: Disparities in Mortgage Lending and Foreclosures, accessed February 12, 2013

3 National Community Land Trust Network, Defying national trends, delinquent mortgages and foreclosures remain low in Community Land Trusts for 2009, April 8, 2010

4 National Community Land Trust Network, Starting a CLT, accessed February 12, 2013