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The Homebuyer’s Quick Guide to Single-Family Land Trusts

A Single-Family Land Trust (SFLT) is created to provide secure affordable access to housing for the benefit of the community.  The SFLT enables people who would otherwise be priced out of the housing market to own a home.  SFLTs are unique in that they separate ownership of land and homes.  SFLTs permanently own the land on which homes are built, while individuals own the home on the land pursuant to a long-term renewable ground lease – this results in a lower purchase price.  Purchasing a SFLT home can be compared to “condominium-style” ownership that comes with the exclusive right to use the land.

  • The ground lease entered into by every SFLT homeowner requires that the owners live in their homes as their primary residence only.  No rentals are allowed.
  • SFLT homeowners and their descendants have a right to occupy and use the leased land for as long as they wish, provided that they abide by the terms of the ground lease. 
  • The term of the lease is 99 years, and the lease may be transferred to eligible heirs. 
  • The homeowner pays a ground lease fee to the SFLT that will be outlined in a Memorandum of Ground Lease, which will be executed at closing. 
  • The homeowner is also responsible for the other traditional costs of homeownership including sales tax, real estate taxes, insurance, regular maintenance and upkeep of the home.
  • If you purchase a SFLT home you must do the following:
    • Meet income-eligibility requirements.
    • Have sufficient income to support the housing costs for the home chosen.
    • Obtain mortgage pre-qualification and present it with the application (preferably a lender that is familiar with land-lease transactions).
    • Complete a homebuyer education class through one of the local providers.
  • The terms of the ground lease place some limitations on the resale of the home – preventing resale to a household that does not qualify as low-income or moderate-income and limiting the sales price to keep it affordable. 
  • The lease lays out a “resale formula” that determines the maximum allowable price that may be charged upon resale of the home to give homeowners a fair return for the investment, while keeping the price affordable for subsequent lower income buyers.

Frequently asked questions for single family land trust properties.

Income and Asset Related Documentation Needed for all Borrowers and Household Members

Income: For all household members over the age of 18

• Paycheck stubs for the period covering the most recent 30 days of year-to-date (YTD) earnings

• W‐2 or I-9 tax forms for the period covering the most recent two years

• Additional documentation reflecting any bonuses, commissions, overtime or other sources of income

• Signed federal tax returns for the last two years (with all schedules) if you are self-employed or receive rental income

• Award letters for retirement, Social Security and disability income listed on the application

Assets: For all household members

Asset statements for all open accounts, regardless of the balance, for the period covering the most recent six months (or recent quarterly statement) such as:

  • Checking and savings
  • Certificates of deposit (CDs)
  • 401ks
  • Thrift Savings Plans (TSPs)
  • Individual Retirement Accounts (IRAs)
  • Stocks, bonds, or other securities

Upon receipt of all required documents, the request will be reviewed by the Housing Finance Authority of Pinellas County, who will contact you to review your information and/or obtain any additional information needed for the purposes of determining your qualification terms.

Depending on unique circumstances, the borrower(s) may be required to provide additional documents. Examples include divorce decree to confirm child support and alimony payments, a copy of the earnest money deposit check, a gift letter for funds to be provided by a family member, etc.

Other Income Notice: Alimony, child support or separate maintenance income need to be revealed. ALL INCOME COUNTS.

Single-Family Land Trust Resale Information

The Single-Family Land Trust (SFLT) is created to provide secure affordable access to housing for the benefit of the community. The terms of the ground lease place limitations on the resale of the home – preventing resale to a household that does not qualify within income guidelines and limiting the sales price to keep the home affordable.

The ground lease resale formula will be equal to the purchase price paid by the homeowner for the home (minus the land) plus a share of the increased market value of home (minus the land), if any. There is zero percent (0%) if sold with two (2) years or less from the date of purchase; or three percent (3%) for each completed year of ownership if sold after two (2) years from the date of purchase.

All resales or refinancing must be approved by The Housing Finance Authority of Pinellas County.

Sample:

Resale Price Formula = Appraised value (new appraisal) – original purchase price x 3% x years of ownership

Home purchased for $100,000

New appraised value is $175,000

Increased market value is $75,000

3% of $75,000 = $2,250

# of years in house = 4 x $2,250 = $9,000

If you purchased a home for $100,000 and the new appraised value and decide to sell in 4 years, your resale price would be $109,000.

OR

If you purchased a home for $100,000 and decide to sell in 18 months (less than two years) your resale price would be $100,000.