The homeownership resale formula sets a maximum price for which land trust homes can be sold in the future which ensures that ICLT homes remain affordable to future buyers. Rather than rising (and falling) with the market, ICLT home prices only increase as fast as people’s incomes. In many cases this may mean that ICLT homeowners will earn less appreciation than traditional homeowners but the formula has been designed to offer ICLT homeowners the opportunity to build very significant equity.

The ICLT resale formula allows the value of the homes to appreciate at the same rate as local incomes. The price of each home is increased each year based on the percentage change in the Area Median Income (AMI) for Orange County. Homeowners who make certain approved capital improvements to their homes can also receive a credit for these improvements which would increase the sale price of their homes even further. The resale formula is described in detail in the ground lease, and should be carefully read and clearly understood before deciding to purchase an ICLT home.

ICLT Resale Formula:
Initial Purchase Price
+ Increase in price based on change in AMI
+ Value of approved capital improvements
= Maximum Resale Price

The Area Median Income for Orange County is published annually by the California Department of Housing and Community Development. Over the last fifteen years, the average annual increase in the Orange County Median income has been 2.6%. In the future the average increase, could, of course, be higher or lower than this.