How a Couple Bought a Home for $135,000 When Neighbors Paid Much More

• Melisa Gomez-Romo and her husband bought a home for $135,000 in Duluth, Minnesota, in 2022.
• The couple paid less than usual for the area by going through a community land trust, or CLT.
• The CLT program allows people to buy discounted homes while the trust keeps ownership of the land.

This as-told-to essay is based on a conversation with Melisa Gomez-Romo, 40, an associate at One Roof, a nonprofit organization that provides housing services to Minnesotans. In 2022, before she started working there, she and her husband purchased a home for their family of five in Duluth, through One Roof’s community land trust program.

Community land trusts allow low-income homebuyers to purchase homes at a reduced price in exchange for the trust’s retaining ownership of the property’s land. There are 471 accredited land trusts in 46 states. Here’s one way to find one near you.

The essay has been edited for length and clarity.

My husband and I moved to Duluth in 2018. We had set a goal for ourselves: to either purchase a house within five years or move back to Fayetteville, Arkansas.

However, after COVID, the real-estate market here became really unaffordable. Duluth is considered a climate haven, so there have been people with larger incomes moving into the area and buying massive amounts of property. It’s caused home prices to creep up.

A couple of years ago, you could get a starter home here for $90,000, but the prices have dramatically jumped. Now, homes are going for $170,000 up to $500,000.

With home prices going up so much, we were afraid that we would not be able to qualify for a home without assistance — that if we walked into a bank, we were going to get shut down because our credit score wouldn’t be enough or our student-loan debt would be too much.

Community land trusts were an unfamiliar concept

I learned about community land trusts while driving through a neighborhood. I noticed a home with a for-sale sign, along with another that said “One Roof Housing.”

I looked up the home on Zillow and learned more about One Roof. It’s a community housing organization that offers homebuyer education and also sells affordable homes through a community land trust program.

Community land trust programs work like this: You purchase a home from the organization, but lease the land beneath, which reduces the cost of the home — homes sold through the program are sold below market rate. When you decide to sell the home, you have to sell it back to the organization, and they receive a portion of its equity.

There are different methods of acquiring the homes — some are sold to One Roof specifically for the Land Trust Program, and others are sold back to the Land Trust Program.

It was a new concept for my husband and me, but it opened up the possibility of someday owning a home.

Sometimes, that’s all we need — the seed to be planted.

My family doesn’t come from money

When we first moved to Duluth in 2018, we were living in an apartment complex that had been converted from an old schoolhouse. While it was affordable — our rent was $995 each month — it was built back in the 1800s and was deteriorating. Whenever it rained, the windows would let water into our apartment.

We lived in a rough area of town, too, but knew that we didn’t have the credit score or money to buy a home. We decided to put our focus on building stability for our kids, who had been diagnosed with autism, and building up our credit.

When year three came of living in our apartment, my husband and I finally had the credit score and money needed to consider homeownership.

At the time, a really good friend of mine had bought a land trust home with One Roof. She encouraged us to try out the process. My friend is Mexican Ojibwe and a single mom. I thought, “If she can do it, maybe we can do it, too.”

I’m Hispanic. My parents were immigrants from El Salvador. My husband is a first-generation foster kid with a Mexican background. For people like us, who don’t come from generational wealth, word of mouth can be very important.

That’s because when you hear about the homebuying process from someone who shares similar life experiences with you, it lends more credibility and makes it feel more realistic.

My husband and I became first-time homebuyers

In 2021, my husband and I attended a “home stretch” workshop with One Roof, which taught us how to become a homeowner.

One of the biggest takeaways from the program was that the cost of moving into another apartment was comparable to making a down payment on a house. We also learned that banks offer programs that could help us qualify as first-time homebuyers.

Growing up in a Hispanic household, sometimes you don’t know how to talk to lenders or the bank. So having someone say, “Hey, we can help you with the whole process” was necessary for us.

Also, hearing that we had enough money ($5,000 saved up) and the criteria to be homeowners (a 750 credit score) was life-changing.

By 2022, we were first-time homebuyers. Through One Roof, we purchased a cute little home in a perfect neighborhood for $135,000. We have a 99-year lease for the land beneath our home, with a monthly leasing fee of $35 to One Roof.

Before we moved in, One Roof fixed it up from the basement to the roof — and that was something that was really big for us. With the hard winters in Duluth, snow can ruin a basement or the foundation of the home.

Our home was built in 1910 and has three bedrooms and one bathroom. It’s been valued at $175,000. If the home weren’t with the land trust, we would not have been able to buy it at that price.

Our lives are much better

When buying a land trust home, not only do you have to qualify for the land trust program, but you also have to qualify for a mortgage at the bank. Everything that the bank requires for a typical home is going to be exactly the same.

In 2022, the requirements for the One Roof Land Trust were that you could not exceed a $70,850 annual gross income.

The only thing that stands apart is that you have to make a separate appointment with an attorney to sign a legal document saying that you are leasing the land. Additionally, for insurance purposes, the land trust is listed as part of the ownership of the home.

Having a home is such a huge deal for us because it didn’t feel attainable due to our financial situation.

If it were just the two of us, my husband and I could have just stayed in an apartment — it might have been manageable. But the kids needed so much more space and privacy.

Now, we don’t have to share community spaces, like a laundry room, and our kids have a front and back yard. We also don’t have to worry about rent increases each year when we renew our lease.

When my husband first applied to get our land trust home, we had spoken to many people and heard negative things about it. People would say, “You don’t get the full percentage of the equity of your home.” And we’re like, “All the money that we have is going toward renting now, so we’re not losing anything at all.”

People would also say, “Oh, you’re not going to make any money off the house.”

But I think about it this way: If we were to sell our home back to the land trust, we’re continuing to help make it affordable for the next family. So we don’t mind that at all.