Housing Ladder: Types of Properties
The NCLT offers rental units to help alleviate immediate affordable housing needs and as the first step up the housing ladder. There are four different types of home ownership opportunities along the housing ladder: Shared Homes, Housing Cooperatives, Condominiums, and Single Family Homes.
These homes are a form of cooperative housing. In the traditional cooperative, residents own a share of the entire project, with the right to occupy their individual, self-contained housing unit. In shared housing, cooperative owners independently occupy a room, typically in a larger single family home, and share living areas, common areas, kitchen and bathrooms. Residents build community through shared meals and household responsibilities. This model can be very effective for singles and/or couples, but may be a less desirable option for families. Typically, people who purchase NCLT shared homes are those with incomes between 25% and 50% of the area's median income.
Often referred to as “co-ops”, these homes are not individually owned by the residents. Residents own a share of the entire project, with the right to occupy their individual unit. The association of owners qualifies for a loan based on the income from each resident’s monthly share of costs. Residents own and manage the property, pass all cost savings on to themselves, and are eligible for homeowner tax benefits. With affordable rents and guaranteed housing, cooperative housing owners can build savings toward individual home ownership. There are several types of cooperative housing. NCLT offers only Limited Equity Housing Cooperatives.
Limited Equity Housing Cooperatives (LEHC)
A form of cooperative housing, LEHCs are a form of housing that allows even very low-income people to become homeowners. Externally, LEHCs have the same appearance as condominiums. The difference is that LEHC owners do not own their own unit -- instead they own a share of the entire building. One advantage of this arrangement is that they do not have to qualify for a loan to buy into an LEHC, which is one of the biggest stumbling blocks for many very low-income families. Down payments are also typically very low for LEHCs. However, LEHCs offer the same sense of community that limited-appreciation condominiums offer. People who purchase NCLT LEHCs are those with incomes between 40% and 65% of the area's median income.
Condominiums, or “condos”, are owned by the individual purchaser, just like single-family homes. Equity accrues and homeowner tax benefits are available. Condos can be attached houses or free-standing townhouses that remain permanently affordable. Condo homeowners form a home owners’ association (HOA) and share the expenses of managing and maintaining the entire property, making condominiums more affordable than single-family homes. Through the HOA, residents are able to create a strong sense of community for themselves and their families.
Limited Appreciation Condominium (LAC)
One type of condo, the limited appreciation condominium (LACs), is especially suitable for fist time homebuyers and is offered by NCLT. If other features are equal, they are much more affordable than single-family homes. LAC owners own their own units and private outdoor space but share additional common outdoor space with other LAC owners. NCLT LAC owners agree to pass on the subsidy that made their home affordable to the next LAC buyer by limiting the appreciation on their home. Many people who choose LAC style condos do so because of the sense of community that develops when living in LAC. Typically, people who purchase NCLT LACs are those with incomes between 60% and 80% of the area's median income.
Single Family Homes
Single family homes are seen by many as the top rung of the housing ladder, but they are often the most difficult for low-income people to reach. Because of the high costs in the Bay Area, the impact of subsidies is limited. In addition to subsidizing the purchase price, NCLT offers oversight and technical assistance to low-income homeowners to ensure their success as they undertake the responsibilities of ownership. Typically, people who purchase NCLT single family homes are those with incomes between 65% and 100% of the area's median income.