With the help of Habitat Bucks, Penn Community Bank’s residential lending team was able to give a whole new meaning to “home for holidays” this year.
Reaching 125 homes built and sold to low-income households, working to provide attainable home ownership is nothing new to Habitat Bucks. The issue with this model, however, is that these homes have since been re-sold at much higher marketing prices, removing them from the already limited inventory of attainable homes. That’s why Habitat Bucks, along with Penn Community Bank, built its very first home in Bucks County this month through a Land Trust. A Land Trust is a type of shared-equity home ownership that creates and preserves long-term affordability. Now, a single home will serve many low-income households for generations and will forever be affordable in our community.
This situation differs from the typical home buying model – the family is buying the home, but the land is owned and held by Habitat Bucks and they rent the land to the customer. Penn Community Bank lends the family 80%, a silent second mortgage, and Habitat Bucks lends the remaining 20% so that someone could buy with no money down. In return for being able to purchase the home below market price, the buyer agrees to limit their proceeds when they sell so another low-income household can afford to purchase the home. The first household builds wealth and then pays it forward, ultimately growing financial independence within the community. The Land Trust allows those who dreamt of owning a home make it a reality.
“This has never been done before in Bucks County and it really shows how we’re willing to think outside the box for the benefit of the family,” says Jim Calista, Director of Residential & Consumer Lending, “We’re creating a new cycle of helping people in need, which is shown through the repetitive nature of the program.” Providing a low-income family with the gift of homeownership is truly a Christmas miracle – and it’s a gift that will keep on giving.
By retaining ownership of the land and having the right of refusal, Habitat Bucks is able to control that the next family who moves into the home, when the current owner is ready to sell, is a family who qualifies and needs assistance. This new model for the home buying process is a first for both Habitat Bucks and Penn Community Bank – and it’s just the beginning.