Financing

In producing affordable housing, CLTs usually rely on the same resources as other affordable homeownership programs - including grants from government programs, contributions of property from both public and private sources, and volunteer labor. CLT projects do sometimes gain greater access to these resources because the CLT is able to extend their benefits for the long-term - not only for rental housing but for owner-occupied housing as well. In Vermont, both the City of Burlington and the State have adopted policies that provide subsidies only for housing that is permanently affordable.

Residents pay property taxes on their homes if they own them. CLTs usually pay taxes on their landholdings, with the cost usually covered by lease fees from those using the land.  CLTs and their residents can request reduced property tax assessments based on the resale value of the home. This is determined by the CLT's resale formula rather than the market value of the property.

Mortgages Without Land

CLTs have been able to negotiate mortgage agreements that address the basic concerns of lenders while protecting the CLT's long-term interest in the property. These agreements typically allow the CLT to take action to prevent foreclosure and the sale of the property on the open market. Such mortgages give the lender a claim on the borrower's house and leasehold interest. The CLT's fee interest in the land is not mortgaged. These "leasehold mortgages" have been insured by FHA, and have been purchased by Fannie Mae and a number of state housing finance agencies, as well as banks. CLT homebuyers have also received mortgage loans through the Rural Housing Services program of the federal Department of Agriculture.