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Survey finds low foreclosure rates in community land trusts

For Immediate Release
Contact: Anthony Flint 617-661-3016 x116    

     CAMBRIDGE, Mass. (March 17, 2009) -- Homeowners in community land trusts are much less likely to lose their homes to foreclosure than owners of market-rate homes, according to survey results released today by the National CLT Network and the Lincoln Institute of Land Policy.
     At the close of 2008, homeowners in community land trusts had a foreclosure rate of 0.52 percent, compared to 3.3 percent among market-rate homeowners, announced earlier this month by the Mortgage Bankers Association.
      “It’s clear that community land trusts significantly lower the risks of owning a home,” said Roger Lewis, executive director of the National CLT Network.
      Among 1,930 CLT homeowners responding to the survey – representing  about 60 percent of all community land trust homeowners nationwide -- only 1.4 percent were behind 90 days or more on mortgage payments at the end of 2008, compared to MBA data showing between 3.7 and 23.1 percent of market-rate homeowners behind 90 days or more on payments.
      CLTs offer a budget-friendly way to make homeownership possible, removing the high cost of land from the overall price of a home. Typically run by non-profit organizations such as community development organizations, community land trusts lease land and sell the buildings at below-market rates. In exchange for purchasing homes at below-market prices, homeowners agree to limit the price of their homes when they sell, keeping them permanently affordable to future buyers. Although homeowners agree to forgo the possibility of big profits if their neighborhood's property values go up, they are attracted by the opportunity to own homes that they otherwise might not be able to afford.
      In addition, homebuyers in community land trusts benefit from front-end guidance to acquire safe loans, and continuing support and counseling to keep up with mortgage payments.
      “While home foreclosures are devastating families and neighborhoods across America, community land trusts are proving to be a highly effective way to create and sustain stable neighborhoods,” said Lewis. “That’s partly because community land trusts don’t allow the kind of ‘too-good-to-be-true’ financing that has taken down so many American families. There’s added support in CLTs because of the unique, long-term relationships between CLT organizations and homeowners. Often, CLTs provide help even before homeowners miss a mortgage payment. That kind of early action is key to saving homes.”
      As a case in point, a single mother owning a CLT home in Chicago credits early intervention as the only reason she and her children still have a home after nine months of unemployment.
       “We immediately connected her with foreclosure prevention services as soon as she lost her job and before she missed her first mortgage payment,” said Dena Al-Khatib, executive director, Chicago Community Land Trust. “It’s clear to us that but for the community land trust, this homeowner would have been another sad statistic in the foreclosure crisis. Instead, she's one of the success stories.”
      There are over 200 community land trusts including some 6,000 homes across the US, from Delray Beach in Florida, to Austin and Chicago, and Irvine, Calif.  Many CLTs have a track record of zero foreclosures among homeowners.
      Communities that are set to receive federal funding for neighborhood stabilization and long-term housing affordability should consider investing in community land trusts, Lewis said.
      Over half of survey respondents already have received, applied for or will apply for neighborhood stabilization program funds from the 2008 Housing and Economic Recovery Act. CLT organizations will use those funds to purchase foreclosed or abandoned homes and expand their CLTs.
      The National CLT Network ( is a coalition of 230 nonprofits that operate community land trusts. The network aims to help supply decent, affordable housing in cities and rural communities across America by ensuring that property remains affordable even as land values increase. The Lincoln Institute of Land Policy, a think tank in Cambridge, Mass. ( has done extensive research on community land trusts, and provided training and other guidance on best practices.
      The survey was conducted in February, 2009 of  230 CLTs in 45 states. Respondents represented 1,930 CLT homeowners among 85 CLTs in 32 states, including Washington, D.C.




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