In a housing market that's crashed and burned, the Pima County Community Land Trust is rebuilding.
The trust rehabs foreclosed homes to highly energy-efficient standards, and then sells them to lower-income buyers with good credit who qualify, Maggie Amado-Tellez, its director, said.
By acquiring homes with grant funds and retaining title to the land under the house, the trust can offer payments that are not significantly higher than public housing rents. Except the residents have all the interests and responsibilities of owners, not renters, including building equity over time.
Part of the agreement, though, is if they ever sell it must be to another lower-income buyer, and the property remains in the trust, Tellez said.
They've sold 13 homes so far, with three pending this weekend, but Tellez expects at least 50 homes to be part of the trust in the next year.
Unlike down-payment assistance programs where the homeowner is free to resell the house at a higher price, the trust program keeps the cost affordable for another lower-income buyer. That means the money keeps on giving, said Betty Villegas, affordable housing program manager for Pima County, and a member of the land trust's board of directors.
The catch is that homeowners only get 25 percent of the equity, and they don't own the land underneath the home. But it gets them into a home they might not otherwise be able to qualify for at a monthly cost that is 35 percent or less of their income.
Buyers can qualify if they make anywhere from 50 percent to 80 percent of the median income for the area. In this area, a family of four can make as little as $29,800 a year and be a part of the trust.
The trust acquires foreclosed homes bought with federal grants, such as the $7.3 million federal grant the city of Tucson used to purchase 53 foreclosed homes when the market took a downturn. Most of those homes went to the community land trust, said Albert Elias, director of the housing and community development department for Tucson, with a few going into city public housing stock.
Erica Luzanilla, who lives with her three young children in a newly rehabbed home near South Campbell Avenue and East Drexel Road, has much more space now, she said.
Luzanilla lived with her mother for six years, sharing a bedroom with her youngest child and her other two kids sharing a bedroom, she said. She looked at buying a home, but all the ones she saw were run-down, with damage and costly repairs needed - and apartments would have been too small, Luzanilla said.
Now she and her three kids have their own bedrooms, with family living just down the street.
Luzanilla said she plans on staying in the home at least until her kids are in high school-maybe longer. And not owning the land under the home isn't a bother, she said. "At first, I thought, 'Is this a scam?'" Luzanilla said. But now, "I see it more as a savings," she said.
And the program isn't limited to young families. Bj Riley and her husband Bob, retired, sold their 6,400-square-foot home in Maine and traded everything in for an RV. After a couple years of traveling, they settled in a Tucson RV park for seven years.
Buying a home didn't seem feasible, after the market fell and medical expenses left them financially strained. "Our finances took a dive like most people in the country, so I didn't see how we could do it," Bob Riley said.
But after straightening out their credit, the couple has a three-bedroom home on West Roger and North Flowing Wells roads where they both have an office to themselves. There's a backyard where Bob Riley is building a chicken house and replanting his garden.
Moving from a cramped RV is a relief, Bj Riley said, especially with more space for the chihuahuas they own and foster.
Land trusts have existed in the U.S. since the 1970s, according to the National Community Land Trust Network. But it's a fairly new concept in Southern Arizona.
"It's been slow to come here. We were always pretty much an affordable market," Villegas said, until the housing market plummeted.
Another problem in starting the trust was finding banks to issue unique mortgages with two owners, which leads to a specialized financial package the bank has to manage. Many bigger banks couldn't issue them and be profitable, Villegas said.
Compass Bank's previous projects on affordable housing made working with the trust doable, said Sandy Canez, a mortgage banking officer there. She doesn't see the trust loans as any riskier than regular loans, even though lower-income buyers are on the note.
"Any loan can default, so any loan itself can be a risk," Canez said.
People in land trusts are statistically at less risk for foreclosure, said Roger Lewis, executive director of the National Community Land Trust Network.
Now that the housing bubble's burst, there needs to be re-education in what homeownership means, Villegas said.
"With what we've encountered in these last few years, no one's making any or much equity," Villegas said. "We're really going back to the times of our parents and our grandparents - where housing was more of an investment in your family, stability, and your security. It wasn't an investment to get rich."
For Luzanilla, it's an investment in her children's futures.
"I just need to look ahead. They're the ones giving me the strength to do all this."
And it's an investment that Bob Riley wasn't sure he'd ever be able to make again, after the market crashed.
"I didn't think I'd ever see the day I'd qualify for something like this," Bob Riley said. "It's a nice little house. It's something we can handle."
On StarNet: Search a database of homes sold in the Tucson area and see what houses are selling for in different parts of the city at azstarnet.com/homes
"I didn't think I'd ever see the day I'd qualify for something like this.
It's a nice little house. It's something we can handle."
Bob Riley, homeowner through the Pima County Community Land Trust
On the net
For more information, visit pimacountycommunitylandtrust.org