Homeownership Bridge Lease-to-Own Program
A more inclusive path to affordable homeownership.
We have been working in Church Hill since our first home in 2017. Like other neighborhoods we operate in, Church Hill’s real estate market is experiencing rapid growth, pushing out the lower-middle income residents who have lived there for generations. The Maggie Walker CLT seeks to provide homeownership opportunities for those residents to help build the generational wealth that has been historically denied them, at the same time keeping Church Hill a racially and economically diverse neighborhood.
When the COVID-19 pandemic began in 2020, we knew it would have consequences for our work. In the face of economic instability, mortgage lenders raised their credit, debt, and savings thresholds, making it even more difficult to get approved for a home loan. So, in response, we sought funding to place 4 homes into a new pilot program: a lease-to-own arrangement that we call the Homeownership Bridge Program.
How does it work?
Instead of buying the home outright with a traditional mortgage, the homebuyer instead enters into a 12-month lease with MWCLT. For those 12 months, the homeowner pays rent to MWCLT in an amount roughly equal to what the mortgage payment is expected to be. We set aside a significant portion of the rent collected and put it in an Escrow account for the homeowner. During the lease period, the homeowner works on their credit with a credit counselor and builds their savings, which the Escrow account contributes to. At the end of the lease, the homeowner uses the Escrow account to help make a downpayment on their mortgage. The home is sold to them at a deeply affordable price, and will remain in the CLT to be affordable for future buyers.
This means that we can serve buyers at 50% of Area Median Income, or about $40,250 for a family of three. Bridge Program participants also do not have to immediately qualify for a loan, as with our usual application process, allowing MWCLT to support participants while they work to build their credit and savings.
The Bridge Program has 3 families living in the first completed homes for the program, with one more home available for the pilot program in 2021. If you are interested in applying for the program, please see the qualifications and application process, listed below.
How do I apply?
Below are the Homeownership Bridge Pilot Program qualifications. These qualifications should be used as a guide for interested participants. If you believe you fit most of these qualifications, or are close to them, please contact us.
- Credit score around 600 and unable to qualify for a conventional loan
- Minimum household annual income of $38,320
- Maximum household income below 60% of AMI
- Actively seeking homeownership opportunities
- Desire to live in the City of Richmond, specifically the Church Hill area
- The potential to be mortgage ready within 1 year
Interested applicants who meet the program qualifications may start the application process by emailing firstname.lastname@example.org and email@example.com with their interest in the lease-to-own program. Then we will ask you to apply using the application for the Maggie Walker Community Land Trust homeownership program:
- Complete the MWCLT Homeownership Application
- Submit supporting application documents for ALL adult household members:
- Three months of your most recent pay stubs and/or benefit statements
- Two most recent federal tax returns and matching W-2 and/or 1099 forms
- Six months of bank statements from all bank accounts
- Apply for loan pre-approval with MWCLT lenders.
- Attend a MWCLT Information Session. RSVP using the link on the homepage.