Getting The Lay of The Land Trusts

If you’ve been keeping an eye on the housing market, you’ve probably noticed one thing: buying a home feels harder than it used to. Rising prices, limited inventory, and growing competition have pushed homeownership out of reach for many would-be buyers. That’s where community land trusts come in.

Land trusts are legal entities (often nonprofit organizations) that manage, protect, or hold land for specific purposes. Some land trusts focus on conserving natural or agricultural spaces, while others are designed to address a different but equally important challenge: affordable housing. Community land trusts help make homeownership more accessible by separating the cost of the home from the cost of the land, keeping prices lower and preserving affordability for the future.

In this article, we’ll focus on community land trusts, how they work, who they benefit, and why they’re becoming an increasingly important solution in today’s housing market.

What Is a Community Land Trust?

A community land trust (CLT) is a nonprofit organization that owns land with the goal of creating and preserving affordable housing. Instead of selling both the land and the home together, the land trust retains ownership of the land while the buyer purchases the home built on it.

This structure allows homes to be sold at below-market prices, making them more accessible to moderate and lower-income buyers. Homebuyers still enjoy the benefits of homeownership, without the full cost of land driving prices higher.

A local example is One Roof Community Housing in Duluth, Minnesota. With more than 300 homes in its portfolio, One Roof uses the community land trust model to make homeownership attainable in neighborhoods where prices might otherwise be out of reach. By holding the land in trust, the organization is able to offer homes (many built by Common Ground Construction, a wholly owned subsidiary of One Roof) at prices often well below market value. Qualified buyers may also receive assistance with down payments and closing costs, further reducing barriers to entry.

How Community Land Trusts Work

While each program has its own details, most community land trusts follow a similar structure:

The trust acquires land
A nonprofit land trust purchases land or receives it through donations, grants, or public-private partnerships.

Homes are built or renovated
Homes are constructed or rehabilitated on the land and offered to qualified buyers at affordable prices.

Buyers purchase the home, not the land
Homebuyers purchase the house itself while leasing the land beneath it through a long-term ground lease, often 99 years. This long lease provides stability and security for homeowners.

Resale prices are limited
When the homeowner decides to sell, the resale price is determined by a formula outlined in the ground lease. This ensures the seller builds equity while keeping the home affordable for the next buyer. This approach is known as shared-equity homeownership.

The Purpose of Community Land Trusts

Community land trusts exist to solve long-term housing challenges as opposed to short-term affordability gaps.

Expanding access to homeownership
CLTs help buyers who may be priced out of traditional markets achieve homeownership.

Preventing displacement
By keeping homes affordable over time, land trusts reduce the risk of residents being pushed out of their neighborhoods as housing prices rise.

Building stable communities
CLT homeownership supports long-term residency, stronger neighborhood ties, and greater community engagement.

Preserving affordability permanently
Unlike temporary subsidy programs, community land trusts protect affordability for generations, not just one homeowner.

Who Benefits from Community Land Trusts?

Community land trusts create value for more than just individual buyers.

Homebuyers

• Lower purchase prices
• Reduced down payment requirements
• A path to equity and long-term financial stability

Communities

• More diverse and inclusive neighborhoods
• Reduced housing insecurity and homelessness
• Stronger, more resilient local economies

Local Governments

• Long-term returns on housing investments
• Fewer repeat subsidies
• A more stable tax base

Employers and Essential Workers

Teachers, healthcare workers, and public servants can afford to live closer to where they work, strengthening the communities they serve.

How Financing Works for Community Land Trust Homes

Many buyers are surprised to learn that community land trust homes can often be financed using traditional mortgage products. In many cases, eligible options include conventional, FHA, VA loans (in some cases) and State and local housing programs.

Lenders work directly with the land trust to ensure the ground lease meets underwriting requirements. While the process may include a few additional steps, financing a land trust home is often more straightforward than buyers expect.

At Summit Mortgage, our team regularly helps buyers navigate these details and understand how community land trust financing works to avoid surprises along the way.

How Much Equity Can You Build?

Homeownership is one of the most common ways families build long-term wealth, and community land trust homes are no exception.

CLT homeowners typically build equity by paying down their mortgage over time, receiving a portion of market appreciation and benefiting from lower housing costs overall. While appreciation is capped, homeowners also take on less risk and enjoy greater long-term affordability. For many families, this balance creates a more sustainable and predictable path to financial security.

Are Community Land Trusts Right for You?

A community land trust home may be a good fit if you:

• Want to own a home but struggle with rising prices
• Plan to stay in the home long-term
• Value stability over rapid appreciation
• Prefer predictable housing costs

They may be less ideal for buyers focused primarily on maximizing short-term resale profits. As with any home purchase, it’s important to understand your goals and choose the option that aligns with your priorities.

How Summit Mortgage Can Help

Community land trusts play a vital role in expanding access to affordable homeownership, and financing is a key part of making that possible.

At Summit Mortgage, we work closely with first-time buyers, local land trusts, and community partners. Our goal is to make the mortgage process clear, accessible, and supportive, so you can focus on building your future with confidence.

Whether you’re exploring a community land trust home or considering a traditional purchase, a Summit Mortgage Loan Officer is here to guide you every step of the way when you’re ready to get started.