The Home Buyer Rehab/Lease to Purchase Program lowers the cost of housing by separating ownership of the house from ownership of the land on which the house sits. COMMUNITY LAND TRUST OF SCHENECTADY fills the financial gap between an affordable mortgage and the cost of a home in the city of Schenectady. Homebuyers lease a CLTS home with the intent that they will purchase within 12 months. CLTS retains ownership of the home and land, however a portion of the residents monthly payment will be set aside to be credited towards down payment and/or closing costs (Credits will not apply if purchase agreement is not upheld by resident).
Monthly payment is based on what payments would be if a mortgage existed, including all escrow estimates. Residents then have 12 months to deal with any and all obstacles preventing them from being mortgage eligible and completing their purchase agreement on the home.
Residents then lease the land from CLTS for ninety-nine years, with an option to renew for another ninety-nine years. Under the ninety-nine year ground lease agreement homeowners have full rights and responsibilities to and for the land, but agree that when or if they sell their home they do so at a price that is affordable to the next household of modest means. When a CLTS homeowner wants to sell their home they can sell it to another income qualified household for a limited amount of the equity that is in the house at the time of sale.
This section outlines the process prospective homeowners must follow to apply for and purchase a home through the COMMUNITY LAND TRUST OF SCHENECTADY Home Buyer Rehab/Lease To Purchase Program. The road to home ownership is generally long, challenging and risky. Reaching that goal under the land trust model is no exception. There are no guarantees until you have signed the final closing documents and moved in to your home. CLTS advises all prospective homeowners to read all the information contained in this section carefully and to meet with our staff to discuss your situation and your homeownership options.
Learn about the community land trust model: COMMUNITY LAND TRUST OF SCHENECTADY staff can explain the land trust concept, the purpose and mission of CLTS and the resale formula. You can attend our informational meeting, which is held on the 3rd Wednesday of every month.
Determine your eligibility: You are eligible if you meet all the eligibility criteria for this program. COMMUNITY LAND TRUST OF SCHENECTADY advises you to read through the entire information packet and application, which we will provide, to determine your willingness to complete all steps, including taking homebuyer education classes and paying all fees.
Attend a Homebuyer Education Class
Submit an application to CLTS: Complete and submit an application with a membership fee (if you are not already a member) and an application fee. Applications are reviewed on a first-come, first-served basis.
Receive and acknowledge receipt of a Letter of Intent from CLTS: This letter is a statement of understanding and a declaration of COMMUNITY LAND TRUST OF SCHENECTADY‘s commitment to work with you. This letter also includes a statement of the subsidy amount that you are eligible for through the COMMUNITY LAND TRUST OF SCHENECTADY Home Buyer Driven Program. You will pay a commitment fee when you return your letter of receipt.
Meet with a loan officer to be pre-qualified for a mortgage: At this point, SEFCU has approved the COMMUNITY LAND TRUST OF SCHENECTADY model. Although it may be tempting to work with other lenders, it might mean you would have to do this step twice. We are always willing to work with new lenders, but it may take them some time to approve the program.
Shop for a home: We recommend that you use a realtor, preferably a buyer’s agent, because they are the experts at finding houses. At this point, because you will know your budget, you will be able to look for a home within your price range. As a buyer, you generally pay no realtor fees, unless you are purchasing a home “for sale by owner”.
Because assistance funds are limited you have 120 days from the time COMMUNITY LAND TRUST OF SCHENECTADY receives your commitment fee to come to mutual agreement on an offer to purchase a home. Please stay in contact with a COMMUNITY LAND TRUST OF SCHENECTADY Housing Counselor during this process.
Purchase your home: Make an offer on a house, negotiate the purchase and sale agreement, complete a home inspection, formalize your load and proceed to closing. Complete the necessary paperwork and file the necessary fees to purchase a home with the assistance of COMMUNITY LAND TRUST OF SCHENECTADY.
You are eligible to participate in the Home Buyer Driven Program if you meet ALL of the following criteria in addition to our basic requirements:
Minimum Residency: You must currently live in and have lived in the capital District for at least one year. You must also be able to demonstrate the ability to make a living in the city.
Income: You must earn enough to pay the monthly mortgage, taxes, utility costs, and insurance and ground lease fee. However your household income may not exceed 80% of the median income for Schenectady for your household size.
Credit Rating: You must have a good credit rating showing no delinquencies in the past year and no bankruptcy in the past three years. A credit report is required as part of your application to COMMUNITY LAND TRUST OF SCHENECTADY.
Debt: At the time you apply for a mortgage, your total monthly debt payments should be no more than 10% of your gross monthly income. Debt includes any long-term obligations (a repayment period of more than 6 months), such as automobile payments, child support and student loans, plus the minimum monthly payment for all credit card debts. COMMUNITY LAND TRUST OF SCHENECTADY will determine this percentage during your application review. If you debt load is too great to qualify, COMMUNITY LAND TRUST OF SCHENECTADY staff may refer you to organizations that may be able to assist you to establish a plan for debt reduction. If it appears that it is possible for you to reduce your debt to within the necessary range, you will be placed on the waiting list for funds while you decrease your monthly debt payments.
Employment and ability for homeownership: You must have proof of steady employment or income for at least one year. Sources of income include all wages, overtime and tips; interest and dividends; social security, annuities, pensions; unemployment, disability and severance compensation; alimony and child support; and most forms of public assistance. Self-employed individuals must demonstrate proof of earnings with tax returns for the past two fiscal years.
First time homebuyer: You must not currently own a home nor have owned a home in the past three years.
Assets: If you have assets exceeding $10,000 in value, they must be used toward housing. Assets include savings, land, recreational vehicles, boats, art collections or similar items. Not included in the calculation of asset value are household possessions, cars, tools, Individual Retirement Accounts (IRA’s) or pensions.
CLTS Annual Membership ($15 per adult person): Annual membership dues must be paid at the time of application, if not before. This non-refundable fee supports COMMUNITY LAND TRUST OF SCHENECTADY operations.
Application Fee ($25 per household): The application fee is due with your application to join the program. This fee is non-refundable and supports staff time to process your application.
Commitment Fee ($50 per household): The commitment fee is due when you acknowledge receipt of the Letter of Intent from COMMUNITY LAND TRUST OF SCHENECTADY. In the event that you do not qualify for a mortgage this fee will be refunded. The fee is imposed to support project costs and to establish a committed relationship with CLTS.
Earnest Money Payment (Approximately $500): To determine the exact amount of this payment, it is advised that you as your real estate agent. This payment is due when you make an offer to buy a home. It can be refunded if you do not qualify for a mortgage or when you exercise an option to withdraw from your purchase and sale agreement, provided you act in a timely manner. COMMUNITY LAND TRUST OF SCHENECTADY must approve the house and this must be a contingency in any purchase contract offers made. This payment is part of the purchase and sale contract, which is negotiable, and will be credited toward the required 3% down payment.
Home Inspection ($200-$300): COMMUNITY LAND TRUST OF SCHENECTADY requires a full home inspection by an ASHI certified inspector. CLTS will provide you with a list of certified home inspectors. You and CLTS will negotiate the results of the home inspection with the seller prior to making a formal loan application to the bank. This non-refundable amount is in addition to your required 3% down payment.
Mortgage Application Fees (Varies): Mortgage application fees are paid to, and determined by, the bank from which you are obtaining a mortgage. These fees are paid to process your application. Currently SEFCU has chosen to waive its mortgage application fee.
Balance of the 3% down payment requirement (Varies): This is your actual down payment on the purchase of your home. It will vary based on the purchase price of the house. The amount of this payment is 3% of the the purchase price, less the Earnest Money Payment.
Homeowner’s Insurance ($250-$600): One full year of homeowners insurance is purchased once a closing date is set. This rate varies based on amount of coverage and insurance company chosen.
Closing Costs: Closing costs will be paid out of COMMUNITY LAND TRUST OF SCHENECTADY‘s subsidy ($3000-$4200). These costs include: escrow fees, title insurance, property taxes, appraisal, recording fees, ground lease and legal fees.
Also be aware of the other costs associated with moving in to your own home!
Location :Homes must be located in census tracts 201, 202, 203, 211.01, 211.02, 212, 213 or 215.Homes may not be located in 100-year flood zones or environmental hazard areas, such as steep or unstable slope areas.
COMMUNITY LAND TRUST OF SCHENECTADY reserves the right to approve or not approve any home for which CLTS financial assistance will be required. Exceptions to these policies may be considered but will need to be approved by the COMMUNITY LAND TRUST OF SCHENECTADY Board of Directors.