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February 21, 2003
Kulshan CLT Shows a Five-Way Win with the First Use of House Key Mortgages for CLT Affordable Homeownership
(Bellingham)-Kulshan Community Land Trust will increase its inventory of permanently affordable homes in Whatcom County to ten during the month of March. Helping ten households achieve their dream of homeownership in just nine months is "knockout performance" for a young organization, according to Heyward Watson, director of the Fannie Mae Washington State Partnership Office. Kulshan CLT's executive director, Paul Schissler, points to broad and growing support for the CLT concept to explain why Kulshan CLT is the fastest growing affordable homeownership provider in Northwest Washington. "Kulshan CLT can offer downpayment gap assistance, but most of the cash comes from the homebuyers' mortgages. Starting in March, House Key mortgages will make our program work even better, and it looks to me like a five-way win," according to Schissler.
The Washington State Housing Finance Commission is set to announce at their Bellingham meeting/conference on February 27th that its House Key mortgages can be used in Kulshan CLT's programs, the first time a state housing finance commission has endorsed CLT programs. The House Key Program provides a below-market first mortgage for first-time homebuyers. The current interest rate is 5.25% fixed for 30 years. According to Dee Taylor, Director of the Commission's Homeownership Division, "The Commission is thrilled to be able to work with the Kulshan CLT on this ground-breaking program. It's an opportunity for us to offer their homebuyers another choice in the home buying process." For more information on House Key and other programs offered by the Commission, see their Web site at www.wshfc.org or call toll-free 800-767-HOME.
From Kulshan CLT's vantage point, it looks like a five-way win for permanently affordable homeownership:
- Homebuyers will have more buying power because lower interest rates will allow them to borrow more and build their equity more quickly, using the CLT shared equity approach that offers a reasonable rate of return on their investment.
- Kulshan CLT will stretch its public and private downpayment assistance further to help more homebuyers because each homebuyer's downpayment gap will be smaller.
- The Washington State Housing Finance Commission will add the CLT approach to the many other ways its helps to create affordable housing.
- The three mortgage lenders working with Kulshan CLT will be able to offer lower interest rates and help more homebuyers, all of whom are credit-worthy customers but could never become homeowners without the downpayment help of Kulshan CLT.
- The fifth winner is the community because homeownership strengthens neighborhoods and allows vital members of our community put down roots close to where they live and work.
The CLT model of ownership is different than conventional homeownership because, while the household owns their house, the CLT, a nonprofit membership organization, owns the land to insure the permanent affordability. Kulshan CLT's first ten homes remain permanently affordable, and future generations of working people of limited means will always have homeownership options in Whatcom County. "Our strategy will build a growing inventory of homes that stay affordable, even when the housing market climbs further out of reach for local families," said Schissler.
Kulshan CLT had lots of help to create and implement this dynamic homeownership program, and its success depends on the involvement of a growing crowd of community supporters. For downpayment gap assistance, the City of Bellingham used federal HOME funds to match the Washington State Housing Trust Fund and Federal Home Loan Bank of Seattle funds. Fannie Mae offers a secondary market for mortgages, giving lenders an efficient way to make more loans.
Kulshan CLT is a nonprofit membership organization, working for permanently affordable access to land and housing in Whatcom County. For more information on Kulshan CLT, call 671-5600 or visit www.kclt.org.
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