Affordable homes for our community...
now and in the future

FAQ

What is a community land trust?

How is CPAH homeownership different from traditional homeownership?

How does CPAH benefit the community?

How is CPAH governed?

How is CPAH funded?

What is the relationship between the city of Highland Park and CPAH?

How does CPAH acquire property?

What are the tax advantages to donating property to CPAH?

What is the process for reselling the home?

How are property taxes handled?

Who can qualify for a home?

How can I apply for a home?

How can I help?

What is a Community Land Trust?

A COMMUNITY LAND TRUST (CLT) IS A FORM OF SHARED EQUITY HOMEOWNERSHIP DESIGNED TO ENSURE THAT HOMES WHICH ARE MADE AFFORDABLE through public or philanthropic subsidies remain affordable over the long-term, while still allowing homebuyers to build wealth through building equity and receiving a fair share of appreciation. CLTs are nonprofit organizations that own the land on which homes are situated. The CLT then sells the physical structure to homebuyers at an affordable price to income-qualified buyers along with a 99-year, renewable ground lease on the land. When the homebuyer desires to sell their home, it is sold at an affordable price to a qualifying homebuyer or back to the CLT. Essentially, CLTs keep the price of homes affordable by separating the price of the house from the cost of the land. The benefit of this is that CLTs do not need additional subsidies each time the home resells; the permanent affordability is built into the program and communities build a permanent inventory of housing that will remain affordable in perpetuity.

 

How is CPAH homeownership different from traditional homeownership?

Same Different
The homeowner has a mortgage with a bank The purchase price is typically 20-65% below the market value
The homeowner accumulates equity The homeowner leases the land for a nominal fee via a 99-year, renewable ground lease
The homeowner can make alterations and improvements Resale restrictions require the home to be sold to the CLT or an income-qualified buyer
The homeowner receives federal and state tax benefits for homeownership The resale price is based on a formula designed to ensure the continued affordability of the home
The homeowner pays property taxes CLT homeowners pay lower property due to these restrictions
The home can be inherited Upon resale, homeowners are exempt from the Highland Park real estate transfer tax

How does CPAH benefit the community?

CPAH provides housing opportunities for low- and moderate-income households who live and work in the community. Many people who work in the community are forced to live elsewhere which hurts the local economy, increases traffic congestion and makes it more difficult for businesses to recruit and retain employees. Workers making long commutes also negatively impact the environment and are forced to spend more time away from their families on a daily basis. CPAH promotes inclusiveness and strengthens the community's commitment to cultural and economic diversity. CPAH helps retain valuable community members who are often pushed out of the community such as seniors, young adults who grew up in the community, persons with disabilities and families who are faced with the loss of income. CPAH also helps communities comply with the Illinois Affordable Housing Planning and Appeals Act. Finally, CPAH maximizes the cost-effectiveness of public and private subsidies by building a permanent inventory of affordable housing on behalf of communities with a one-time subsidy that is reused with each resale.

 

How is CPAH governed?

CPAH is governed by a minimum of eleven and a maximum of seventeen member Board of Directors who are elected to serve three year terms. In order to maintain its Community Housing Development Organization (CHDO) status, no more than one-third of the Directors may consist of elected officials or other members of the public sector and at least one-third of the Directors must be representatives of the low-income community as defined by the U.S. Department of Housing and Urban Development. Effort is made in the designation and selection of Directors to ensure that, among the persons serving on the Board at any one time, there is to be found representation from the communities served by CPAH, as appropriate, and from one or more of the following categories: housing professionals, local employers, lending institutions, business leaders, civic leaders, religious leaders, social service providers, funders or fund development specialists. An attempt is made to ensure that at least one-third of Directors reside on land owned by CPAH or are on CPAH's waiting list.

 

How is CPAH funded?

As a nonprofit 501(C)(3) organization, CPAH is funded through a variety of public and private sources including Highland Park's Housing Trust Fund, the Lake County HOME program, the Lake County Affordable Housing Program, Moraine Township, First Midwest Bank, First Bank of Highland Park, Lake Forest Bank and Trust, the Trillium Foundation and many private donors and community members who support our work. CPAH is attempting to expand and diversify its funding base in order to ensure organizational sustainability and to continue its leadership in the field of affordable housing.

 

What is the relationship between the City of Highland Park and CPAH?

The City of Highland Park and the Highland Park Housing Commission initiated CPAH, then known as the Highland Park Illinois Community Land Trust, as an independent nonprofit organization in 2003 as one of the key recommendations in the City's affordable housing plan. CPAH operates independently from the City although it continues to receive financial support from the Highland Park Housing Trust Fund and it works closely with City staff to administer Highland Park's Inclusionary Housing Program. To help ensure a close working relationship, it is CPAH's intent to retain one CPAH Board position for a member of the City Council and one position for a member of the Highland Park Housing Commission. As CPAH partners with other communities in the region, it intends to forge similar working relationships.

 

How does CPAH acquire property?

CPAH purchases property that is available in the community, with a special emphasis on homes that are foreclosed or in serious disrepair. This provides a double community benefit of both creating affordable housing and also cleaning up a blighted or problem property in the community. CPAH also receives donated or discounted property from businesses, institutions and private individuals. Properties can include a variety of housing such as single-family homes, duplexes, town homes, condominium units and multi-unit buildings as well as undeveloped land. CPAH makes every effort to locate affordable housing near transportation, employment and community services.

 

What are the tax advantages to donating property to CPAH?

Property donated to CPAH is considered a tax deductible charitable contribution for federal and state income tax purposes. The charitable donation may be taken in the year of the donation or spread over the subsequent five years. In addition to the deductions, CPAH can apply for the Illinois Affordable Housing Tax Credit Programwhich allocates tax credits worth 50% of the appraised value of the property. These tax credits can be used by the donor or sold to a third party. When combined with other savings such as exemption from the Highland Park Transfer tax and not paying sales commissions, these tax advantages may give the donor nearly the same after-tax financial return as from a fair market sale, while also providing a substantial public benefit. The exact tax implications of your donation will depend on the value of your gift, your financial circumstances and the tax rules in effect at the time, and other factors.

 

What is the process for reselling the home?

When a homeowner desires to sell their home, it is sold at a formula price to another income-qualified buyer or back to CPAH. The formula price is designed to give the homeowner a fair share of appreciation while still keeping the home affordable for the next buyer. The homeowner may also be eligible to receive a credit for mechanical or structural improvements made to the home. The homeowner can avoid real estate commissions and is also exempt from the Highland Park Real Estate Transfer Tax.

 

How are property taxes handled?

Like traditional homeownership, CPAH homeowners are responsible for paying property taxes. However, since the homes may only be re-sold at a formula price, the property taxes are based on the resale-restricted value of the home which results in significant cost savings to homeowners.

 

Who can qualify for a home?

The maximum allowable gross household income is 120% of the Chicago Area Median Income (AMI) as established annually by the U.S. Department of Housing and Urban Development. Income limits vary per home depending on the type of funding used to acquire, rehabilitate and/or build the home. Most homes are limited to households earning less than 80% of the AMI, or approximately $60,000 for a four-person household. In addition to the income limits, homes must be owner-occupied and used as a primary residence. Applicants must also be able to qualify for a mortgage from a participating lender. Priority is given to low-income households who live or work in the community.

 

How can I apply for a home?

In order to qualify for a home, we invite you to attend a 45-minute information session which reviews our affordable housing program and requirements. Applications for housing are available at all information sessions. If you are unable to attend a scheduled information session, please contact us at 847-681-8746 to arrange an individual meeting.

 

How can I help?

As an individual, a business, or an organization, you can help CPAH by:

  • Making a financial contribution
  • Donating property or selling property to CPAH below the appraised value
  • Contributing professional services
  • Volunteering
  • Joining our email list and becoming a fan on facebook
  • Donating office equipment and supplies
  • Telling your friends and neighbors about our important work
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Spotlight:

Nusrat's Story

Please read my story to see how CPAH gave me a stable foundation and fresh start, though it was a series of sad circumstances that brought me to CPAH.

It started with unexpected job related setbacks after 20 years working in architecture. We were struggling, and sold our house to help make ends meet. We were just getting by, barely able to afford the rent for our apartment, when my husband passed away from a brain tumor. In addition to the sadness, with no life insurance, I had to face the reality of supporting myself. I found a full-time job but quickly learned that living on just my limited income would be extremely challenging.

Then tragedy struck again. One month before her wedding, my older daughter suddenly passed away from a blood clot in her lung. The grief was paralyzing. To make matters worse, my apartment was too expensive, too big and was filled with painful memories. But where could I afford to go?

When I learned I could afford to buy a two bedroom CPAH home, near my surviving daughter, my job and the place where my loved ones are put to rest, I could not believe it. My home is a secure, affordable foundation on which to build. The grief remains, but I no longer feel as if I am floating, but now feel anchored. CPAH and my small, cozy, affordable home changed my life.


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