Frederick County Affordable Housing Land Trust

The Frederick County Affordable Housing Trust is a non-profit whose purpose is to ensure a sustainable supply of affordable workforce housing. It’s a partnership between Habitat for Humanity and the Frederick County Commissioners, and to the best of my knowledge is the only one of its kind in Maryland (although several other states have similar models).

Who They Are

Municipal land trusts, in general, are non-profits founded with the intent to keep housing affordable. They will either receive public/private donations of land and homes or use government subsidies to purchase them. After they acquire the land they sell the houses to low-income families, guaranteeing the homes are more affordable. In Frederick, the target family income to be served is 30 – 80% of the median income for the County. The goal, as with anything tied to Habitat for Humanity, is to provide a “hand up – not a hand out”. 

What They Do

When an individual applies to purchase a home through the land trust, they require several things from the family. The family needs to be able to qualify for a conventional mortgage (VA is authorized), and they must contribute at least 1% of the purchase price for the down payment. Given many mortgage companies want 10 – 20% down, this is a much more affordable target; especially when the home prices are already lower to promote purchasing. These homes are not open for purchase to be used as rental properties, the owner must live in the home – which, in my opinion, only seems fair. 

Families need to live, or work, in Frederick County. I don’t think this is an onerous requirement, I know many people who commute to DC or Montgomery County because it’s too expensive to live there. Finally, Habitat for Humanity will require the purchasing family to complete 8 hours of home buyer education training, offered by the Frederick Community Action Agency; and attend Land Trust Orientation. Again, to me this makes sense. After all – a big part of Habitat for Humanity is offering a hand up – and educating people about home ownership can go a long way to helping them understand the significance and commitment that comes with purchasing a home.

What Else Should I Know

The Frederick County Affordable Housing Land Trust is always looking for properties. Donations are welcome, although they will also purchase properties – within reason. As a non-profit they can give donors receipts for applicable tax deductions – for more information on how to claim this donation I recommend talking to your tax professional. For families or individuals who own their home, but have no one to leave it to, what better legacy could there be than to give someone, who may not otherwise have an opportunity, the gift of home ownership. An estate planning attorney can help you with these particulars. 

Additionally, because it’s a partnership with Habitat for Humanity there may be options to modify the home at a much lower cost. This is HUGE for veterans and families with disabilities – perhaps they need a ramp installed or doorways widened, just to name a few common needs. With the purchase of an affordable home more of the families budget can be set aside in savings and growth. Instead of being “house poor”, these home owners have the opportunity to establish themselves and focus on living, not just surviving. Click here to see the selection criteria.

Disclaimer

I am not an employee of Frederick County Affordable Housing Land Trust, and any errors noted are my own. If I have misrepresented, or misstated anything please provide constructive feedback so I may make the appropriate change(s). I will be posting about at least one organization a month, using information and notes I took when I met with them – as well as additional research I completed online. All opinions and views are my own.

True “Cost” of Insurance

Often I hear people tell me “insurance is a scam” or “it’s too expensive”; yet when they need it they have never told me they wished they didn’t have it. Unfortunately it’s easy to take insurance for granted, after all we’re told we have to have it on our homes and autos when we take loans to purchase these items, so we seldom think about it unless it’s to shop for cheaper rates. And that’s where I think people go wrong – by trying to save a few dollars they, often unknowingly, put themselves at financial risk.

Now, I’m a fee-only planner – I don’t get paid to sell insurance, and I don’t think people always need to pay a lot of money for the correct coverage (depending on their personal history). But, and this is a big but, I do think people should be honest with themselves about what the correct coverage is. If you’re living almost paycheck to paycheck then you should have disability insurance – because if something happens how are you going to pay your bills? They don’t go away when you get sick or hurt, in fact often they just get bigger. The same goes for auto insurance – it’s not “if” you get into an accident, it’s “when”.

Is insurance a “scam”? No, I think in most situations insurance does exactly what it is designed to do – make you whole after a risk event occurs. But insurance companies are only required to pay for what you have covered, so if you wanted to save a couple bucks a month and dialed back on your coverage don’t complain when you get half of what you think you deserve. This is the true “cost” – having an unforeseen event occur and not being able to recover financially.

In general insurance companies will have different underwriting requirements. You may be able to find lower rates by shopping around, without changing your coverage. Or you may have to increase your deductible, the amount you pay before the insurance company does – which incidentally should come from your emergency fund and not impact your other savings.

How do you decide how much insurance to get? In my opinion talking to a professional is the best route to take, versus going online and possible just answering a few questions. Professionals will ask probing questions designed to get you to think, and they’ll help you determine what the best mix of insurance and self-funding is appropriate for your situation. Best of all at the end of the day it’s ultimately your choice. Everything they say is a recommendation – not an order. If you don’t like what you hear, get a second opinion. But be open and listen, don’t automatically assume they just want to sell you something.