Kulshan Community Land Trust Wins $500,000 Grant to Invest in Permanently Affordable First-Time HomeBuyer Program

(Bellingham)-Kulshan Community Land Trust announced today its largest grant to date, $500,000 from the Washington Housing Trust Fund, to help at least fifteen local families become first-time homeowners by closing the gap between the cost of a starter home and the mortgage each family can afford.

Like the first fourteen homes added to the Trust since last July, the homes will remain affordable forever and, using the CLT’s shared equity approach, each homeowner will earn a reasonable rate of return for as long as they own and maintain the home.

The Housing Trust Fund is administered by the Washington State Department of Community, Trade and Economic Development (CTED).

“We’ve proven the CLT approach will work in Whatcom County, and we’re eager to bring more homes into the Trust as quickly as we can before the house price/wage gap gets wider,” said Paul Schissler, Kulshan CLT’s executive director.

“This Housing Trust Fund grant will trigger over $2,000,000 worth of local home buying activity, plus all the ripple effects of that.”

To make homeownership affordable, each Kulshan CLT homebuyer brings most of the money to the deal, using a mortgage from a local mortgage lender to keep housing costs at one-third of the household’s monthly income.

But house prices are now so high that, even with 4.99% interest 30-year mortgages, low- and moderate-income homebuyers can afford only about two-thirds of the cost of a starter home.

That’s where Kulshan CLT’s help comes in, providing the other one-third of the purchase price from its state, federal and private grant sources. In return for this help, the CLT homebuyers agree that, if they ever sell their home, the price will be affordable to another income-eligible buyer, with no additional subsidy needed.

CLT homeownership differs slightly from the conventional: each household owns their house, and the CLT owns the land and leases it long-term to the homeowner with provisions to insure permanent affordability.

“Kulshan CLT homeowners are doing the community a favor, maintaining a growing inventory of homes that remain permanently affordable for future homebuyers, regardless of how fast home prices climb,” according to Schissler.

“Adequate and affordable housing is critical to the ongoing health of our communities and to our state’s economy,” said Martha Choe, director of CTED.

“We are pleased to be able to make this grant to Kulshan Community Land Trust to continue providing homeownership opportunities for the citizens of Washington state.”

The $500,000 in state funds will lead to over $2,000,000 in housing activity over the next twelve months, if Kulshan CLT homebuyers continue the pace set with the first fourteen homes.

Since last July, Kulshan CLT’s first-time homebuyer deals leveraged $1,213,000 in mortgages from local lenders, used $265,000 in federal funds provided by the City of Bellingham, $349,000 from the HTF, and $56,000 in private funds from the Federal Home Loan Bank of Seattle.

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