Frequently Asked Indy CLT Questions

What is a Community Land Trust (CLT)?

A Community Land Trust (CLT) is a nonprofit organization that acquires and holds land to provide affordable housing and community spaces. The land is owned collectively by the community, while individuals can own or lease the homes on that land. This model ensures long-term affordability and community control.

Why does Indianapolis need a Community Land Trust?

The lack of affordable housing has been a persistent and growing problem in Indianapolis and nationally. With the ever-increasing rising costs of housing, many Black, Brown, and under-resourced residents in Indianapolis struggle to find safe and affordable places to live, which puts a strain on their ability to build wealth and contribute to the community.

One method of addressing this is by creating a Community Land Trust (or a CLT). Creating a CLT in Indianapolis will not solve the deep problems that got us to this point, including the racial caste system and financialization of housing, but we believe it can begin to address these challenges by providing a pathway to cooperative homeownership, stabilizing communities, and building relationships and community wealth.

How do I qualify for Indy CLT homeownership?

All Indy CLT homebuyers must meet our income eligibility guidelines (go to the Buying section for current income limits) and obtain a pre-qualification letter from an Indy CLT partner lender.

How do I determine my household income?

To figure out your household income, add together the gross annual income (before
taxes) for EVERYONE in the household 18 years old and older. Income includes social security, unemployment, disability, self-employment income, part-time employment income and inconsistent income.

Do I have to work with a specific realtor?

You may choose to work with any realtor of your choice.

What type of loans work with the Indy CLT?

Indy CLT homebuyers must qualify for a Conventional mortgage (30-year mortgage with a fixed interest rate). The Indy CLT does not work with FHA, ARM, VA or Interest-Only mortgages.

How does buying a home through a CLT differ from traditional homeownership?

When you buy a home through a CLT, you purchase the home itself but lease the land it sits on from the CLT. This structure keeps the cost of the home lower and ensures that the home remains affordable for future buyers. You gain the benefits of homeownership while being part of a community-driven model.

What happens if I get a raise or a higher paying job after closing?

Indy CLT home buyers must meet our income guidelines up to closing. After you close on an Indy CLT home you no longer need to meet our income guidelines.

Who pays the property taxes?

Because CLT homeowners enjoy the benefit of the land and the surrounding community services (schools, roads, etc.), they are responsible for paying property taxes on both the home and the land as assessed by the Marion County Treasurer. As with all homeowners, the interest portion of your mortgage payment is tax deductible. If you itemize your federal income taxes, the property taxes that are paid are also tax deductible.

Are there fees associated with CLT homeownership?

Yes, the homeowner will pay a monthly ground lease fee, likely between $50 - $75.The Indy CLT also requires that you pay a $50/month repair & replacement reserve fee. Your monthly contribution grows a fund that is exclusively yours to use to make future unforeseen and/or planned necessary repairs to your home. The Indy CLT will maintain this account in your name. Any funds you don’t utilize while owning your home will be yours if/when you decide to sell your Indy CLT home.

How may CLT homes be used by homeowners?

The homeowner must only use the home for residential and related purposes.
The homeowner must use the home as their primary residence and homestead. This means living in the home for at least ten months out of the year.
The homeowner may not use the home as a rental property. Written permission from Indy CLT is required for any exceptions to this policy under exceptional circumstances.
The homeowner must act as a good neighbor and not create any nuisances or unsafe conditions on the property.
The homeowner must maintain the home and property in good, safe, and habitable condition and in compliance with all laws, regulations and insurance requirements.
The homeowner is responsible for the actions of any family, friends, or visitors in the home or on the land.

Who is responsible for home and property maintenance?

The homeowner is responsible for maintenance and upkeep on the home and the land. As part of this responsibility, homeowners are required to see that all necessary maintenance, repairs, and replacements are performed on the home when needed. It is the homeowner’s responsibility to pay for the cost of maintenance and repairs, as well as the costs of all utilities related to the home, including water, gas, and electricity.

Can homeowners make changes to the home and the land?

Yes. The homeowner may make changes to the home, such as renovations, as long as any construction activities are performed in a professional manner, and any changes are consistent with residential use. Certain types of construction activities require prior approval from the Indy CLT: these are modifications that affect the footprint, square footage, or height of the home or that add new, permanent structures to the land (such as a garage or fence).

The homeowner is responsible for the costs of any modifications they choose to make. Homeowners should be aware that, because the home's resale price is set by formula in the Ground Lease, any capital improvements made to the home through renovations or additions will not raise the home's resale value.

What kind of support does a community land trust provide for its homeowners?

At Indy CLT, we make a long-term commitment to our homeowners. Types of support offered to homeowners include education, resources and community events. Community land trusts have helped homeowners with foreclosure prevention and re-financing options. Indy CLT homebuyers are part of a larger community – they can choose to participate in the Indy CLT community through voting, volunteering or becoming a board member.

What happens if I want to sell my house?

If you decide to sell your home, the Indy CLT has first option to purchase it. If the Indy CLT does not exercise the option to purchase, you are obligated to sell the home to an income-qualified household and the resale price is limited by the resale formula in the ground lease and agreed upon before the purchase. The Resale Formula Price equals the home's initial sales price plus a fixed increase of 2.0% of the initial price per year. The Resale Formula Price is designed to allow the homeowner to build some equity in the home through appreciation, while ensuring the home is affordable to future limited-income buyers at resale.

Homes purchased through the Indy CLT remain affordable for every new buyer. This shared equity method provides good stewardship of public funds for housing, serving the present community and future generations.

Are there any restrictions on when a CLT homeowner can sell their home?

No. There is no minimum occupancy period, and a CLT homeowner can decide to sell their home at any time.

Are CLT homes inheritable by the homeowner's heirs and beneficiaries?

Yes. The homeowner can designate in their will a person(s) of their choosing to inherit the home and the Ground Lease. Anyone can inherit the home, but unless the inheritor is a child, spouse, or household member of the deceased, that new owner must be income-qualified in order to live in the home. If they are not income-qualified, then they must sell the home back to Indy CLT for the Resale Formula Price. They are then entitled to keep the equity proceeds from the sale. This arrangement is designed to ensure that CLT homes are passed down to individuals and families who are in need of affordable housing. Children, spouses, and household members of the deceased are exempt from this requirement, however.

What are the benefits of donating property to a CLT?

Donating property to a CLT supports affordable housing and community development. You may also receive tax benefits for your charitable contribution. Your donation helps us provide more homes to those in need and supports the growth of our community.

How do I donate property to the CLT?

To donate property, contact us to discuss your intention. We will review the property to ensure it aligns with our goals and needs. Once the donation is approved, you will complete the necessary documentation and transfer ownership to the CLT. We will acknowledge your contribution and keep you updated on how your donation benefits the community.

What kinds of community activities can I participate in as a CLT member?

As a CLT member, you can participate in a variety of community activities such as decision-making meetings, volunteer opportunities, workshops, social events, and sustainability initiatives. These activities help build a strong, connected community and provide opportunities for personal growth and engagement.

How does the CLT ensure long-term affordability?

The CLT ensures long-term affordability through resale restrictions and ground leases. These mechanisms control the price at which homes can be sold, keeping them affordable for future generations. The CLT also actively manages properties to maintain their quality and sustainability.

If you have any more questions, feel free to contact us. We are here to help you understand the benefits of joining our Community Land Trust and guide you through the process of becoming a part of our community.