Last month, GOPC testified to the Senate Select Committee on Housing, which is charged with learning “what additional steps the state can take to encourage homeownership while removing barriers that entrepreneurs encounter as they work to revitalize our neighborhoods.”

In our testimony, we recommended replicating Minnesota’s Community Land Trust Homeowner Initiated Program as one way to help moderate-income families achieve homeownership.

Top-Line Explanation on how the Minnesota Homebuyer Initiated Program Works

When a prospective buyer in Minnesota finds a home on the open-market that they want to purchase, their local Community Land Trust (CLT) purchases the house and land.  The buyer uses a CLT-approved mortgage to buy the house from the CLT.

The CLT provides a “buy-down” grant to cover any costs beyond what the buyer can handle with a mortgage. It also provides a grant to pay for major repairs, such as a new roof or HVAC system.

The house is owned by the homeowner, the land the house sits on is owned by the CLT.

Role of Minnesota Housing Finance Agency

From what GOPC understands at this early stage of its research, at one point, Minnesota’s Housing Finance Agency was providing ~$16M/year to the dozen or so CLTs operating in Minnesota.

Income Requirements

The Homeowner Initiated Program is limited to households earning 80% or lower area median income (AMI).

Homebuyer and Homeownership Training Requirements

Prospective homebuyers must take homebuyer, homeownership, and/or financial literacy classes before becoming qualified to use the Homebuyer Initiated Program.

CLT Grant to Cover Unmortgaged Costs

The CLTs set a maximum amount for the grant and a maximum amount for repairs/rehab.  For example, this CLT sets a “affordability investment” of up to $58,750 and $20,000 in rehab assistance. These ceilings appear consistent with other local CLTs running the Homebuyer Initiated Program.

A more complete explanation of how CLTs work can be found here.

Homeownership Outcomes in Minnesota

Based on a review of individual CLT websites and their reported outcomes, it looks like the Minnesota Housing Finance Agency, through local CLTs, has helped nearly 1,000 homeowners buy a home. ​

Ohio’s Community Land Trusts

Ohio has several well-established community land trusts (ex: Yellow Springs Homes, Inc. and Central Ohio Community Land Trust) and several new ones that are getting started. There are less than a dozen community land trusts in Ohio in 2023, but there are efforts across the state to create community land trusts.

Continued Research by GOPC

GOPC’s next steps are to learn if the program is still operating in Minnesota or if it has evolved into a new program. GOPC will also work to understand what the average annual allocation MHFA made toward this program and how many homeowners were created through the program.  Stay tuned!