ACHT retains ownership of the land on which the homes are located. Homebuyers get a deed to the house and any other improvements on the land, and they get a 99-year renewable ground lease giving them secure long-term control of the land.
The lease gives the ACHT homeowner most of the rights of conventional homeowners, but with a few limitations: if they want to sell the home, it must be sold back to ACHT or to another income-qualified family; and it must be sold for a price that is limited by a formula written into the lease.
ACHT’s resale formula allows the seller to receive the amount they originally paid for the house, plus the value of any ACHT–approved capital improvements they have made at their own expense, plus 25% of any additional appreciation in the value they originally paid for (but not the appreciation of that portion of the home’s original market value that was paid for by ACHT).
Example of Resale Formula:
Homeowner’s Purchase Price: $100,000
Initial Appraised Value: $125,000
Ratio of Homeowner’s Purchase Price to Initial Appraised Value: .80
Appraised Value at Time of Resale: $200,000
Total Appreciated Value: $75,000
Capital Improvement Credit (if any): $5,000
Appreciated Value other than Capital Improvement Credit: $70,000
Portion of Appreciated Value to be shared: $56,000
Homeowner’s Share of Appreciated Value other than Capital Improvement Credit: $14,000
Resale Formula Price: $119,000
For an interactive resale formula spreadsheet, click here.