Kittitas Yakima Valley Community Land Trust Are we the Missing Piece in Your Homeownership Puzzle?

Transcription

1 Kittitas Yakima Valley Community Land Trust Are we the Missing Piece in Your Homeownership Puzzle? Sarah Bedsaul, Executive Director Crystal Dawn Walker, AmeriCorps VISTA

2 KYVCLT Pieces to Your Homeownership Puzzle Affordable housing program. Educational courses. Stewardship of homeowners.

3 Affordable Housing in Kittitas County The Missing Piece to the Puzzle that KYVCLT Provides Average Wage vs. Home Prices Ellensburg Kittitas Co. WA State 65% 57% 36% 31% 21% 12% Fair Market Rent HUD 2014 Guidelines One Bedroom $588 Two Bedroom $795 Three Bedroom $1,171 Homeownership Rate Persons below poverty level

4 CLT HOMEOWNERSHIP Affordability today as well as in the future. Low to no down payment. Low out of pocket expenses. Stewardship throughout the homebuyer, homeownership, and resale phases. Homebuyer education classes. Mentoring. TRADITIONAL HOMEOWNERSHIP Homes are sold at the prevailing market rate often outside the means of the average homebuyer. High out of pocket expenses. Little homebuyer guidance. Education on your own. Lack of mentoring. The model for Affordable Housing is CLT s.

5 You have a mortgage with a bank. You build equity. You enjoy the tax benefits of homeownership. You pay property taxes. You are free to remodel and improve your home and yard. Your home can be inherited. Buying with KYVCLT is like Traditional Homeownership in that KYVCLT is Unlocking opportunities for people and our community.

6 A CLT is Different from Traditional Homeownership in that Deed Restriction: CLT owns the land and homeowner owns the home and improvements. Resale restrictions.

7 How Does a Community Land Trust Work? To protect your rights, and keep the home affordable, you and KYVCLT sign a legal agreement. In this agreement, a resale formula ensures affordability when or if you decide to sell.

8 Typically used with single family homes and townhomes. Homebuyer owns the home. KYVCLT Legal Agreements On paper, KYVCLT owns the title to the land under the home. Homeowner has exclusive and full rights to the land through a 99-year renewable land lease.

9 KYVCLT Ground Lease ( The Main Piece of the Puzzle) Legal Land Use contract, used for closing (33 pages long). Includes: Letters of Agreement Transfer of rights to land Terms of lease Use of leased land Lease fee Taxes and Assessments The home Financing Liability, insurance, damage & destruction, eminent domain Transfer of the home Default Arbitration General Provisions Exhibits

10 Key Pieces to the Ground Lease Agreement 99 year lease, restarts at each sale, can be renewed. You maintain full homeownership rights and responsibilities. You must live in your home 9 months of the year. You cannot sublet. Your heirs can inherit your home. You can remodel and make improvements to your home and yard based on guidelines from your ground lease. You are responsible for property taxes, assessments, and maintenance of your home. Cannot remortgage without permission (reduces predatory lending). KYVCLT has first right of refusal upon sale. You pay a $25 monthly lease fee. Lease automatically makes homeowner a voting member of the CLT. Residential uses only, legal uses only, owner occupied.

11 What Does The Ground Lease Mean? You have full rights to use the land as you see fit. KYVCLT cannot sell the land or change the lease. As a homeowner you have a say in the KYVCLT organization. Basically, you have the exact same rights as a typical homeowner. The land lease is just a way to ensure affordability if you decide to sell.

12 How Does our Resale Formula Work? If you decide to sell, you receive what you paid for the home plus a percentage of the change in property value since you purchased it. This value is based on an independent appraisal that you and KYVCLT agree to.

13 KYVCLT Fixed Rate Resale Formula KYVCLT Lease Article How the Formula Price is Calculated The Formula Price shall be equal to the amount of Homeowner s Base Price (which the CLT and the Homeowner agree is $ ) Plus an interest at a rate of 1% compounded annually for years 1-5. For years % compounded annually For 11+ years 2% compounded annually = Final Payout to Homeowner

14 What CLT Shared Equity Is A way to preserve affordability in perpetuity. A way to help people with limited means to build wealth. Allows for privacy, independence and control for homeowner. What CLT Shared Equity Is NOT Rent control. Municipal land banking, government ownership of land / buildings Commercial housing. For everyone.

15 Our KYVCLT Guidelines 2014 Kittitas County 80% of Median Income Guidelines 1 Person 2 Person 3 Person 4 Person 5 Person $36,750 $42,000 $47,250 $52,500 $56,700 You must be a resident of Kittitas / Yakima Counties. Your household income must be less than the 80% of median family income for Kittitas / Yakima Counties. You must be a first-time home buyer (IRS definition: You have not owned a home within the past three years). You have good or fixable credit. You can obtain a mortgage.

16 The Puzzle Piece About Debt and Credit Almost everyone has some debt. Most lenders want your total debt payments to be no more than 10% of your gross monthly income (before taxes). If it is not there yet, we will help you get your credit score above

17 Savings Estimates for YOUR Homeownership You will need approximately $2500-$3000 to pay closing costs. Down payment and closing cost assistance programs may be available. It is a good idea to keep $1500-$2000 in a savings account for miscellaneous maintenance and home repairs.

18 The next Piece of the Puzzle Schedule An Application Meeting with Executive Director, Sarah Bedsaul

19 KYVCLT Homebuyer Education Classes An Important Piece of the Homeownership Puzzle Educational Classes Washington State Housing Finance Commission First Time Homeowner Seminar Financial Keys (Basic financial planning, home budgeting, credit/debt info + savings Shared Equity & Resale Restrictions Exit Class: Welcome Home 5.0 hrs 1.5 hrs 1.5 hrs 2.0 hrs

20 Stewardship Puzzle Pieces Stewarding Potential Homebuyers through educational classes, --through Homeownership, --and through the Resale Process Affordability of publicly subsidized, owner occupied homes. PRESERVE The Maintenance of those homes, properties. PROMOTE The loss of public, land and affordable housing stock. PREVENT

21 Recapping the KYVCLT Highlights Our Pieces to YOUR Homeownership Puzzle Affordability & Eligibility Ground Lease Deed Restrictions Educational Classes Affordable today, as well as at resale in perpetuity Homebuyer must be in the 80% AMI, Resident of Kittitas / Yakima Counties, First-time homebuyer, and have good or fixable credit. KYVCLT owns the land ~ You own the house 99 year lease, you must occupy the home 9 months of the year, no subleasing, homeowner pays all taxes and assessments. Cannot remortgage without permission and cannot alter the footprint of the home. Eliminates predatory lending and changes to the square footage of the home at resale. 1 st Time Homebuyer Educational Classes 10 hours of instruction + a certificate to qualify for special mortgages and down payment assistance programs Stewardship Homeownership and Resale Stewardship to Preserve, Promote, & Prevent From application process, through educational classes, to homeownership and resale. Keys to your home, membership in the CLT, voting rights, quarterly newsletter Guidance regarding seasonal maintenance, mentoring and coaching through ownership and resale process.

22 Are You Ready to Buy with KYVCLT? Homebuyers may be at different stages. We help folks prepare, to assisting you in creating a plan to pay off debt, to meeting with mortgage lenders.

23 Questions? Does KYVCLT have key piece to your homeownership puzzle?