Choosing a Resale Formula

Preserving the affordability of the housing sponsored by a CLT is mostly a matter of choosing the right resale formula.  Whether embedded in a ground lease or a durable affordability covenant, this formula will determine the future price for which homes will either be repurchased by the CLT or conveyed directly from one income-eligible homebuyer to another (with the CLT’s oversight).  The materials collected (or referenced) in this section of the CLT RESOURCE CENTER examine the different approaches to designing a resale formula and provide guidance for a CLT’s organizers in weighing the advantages and disadvantages of each.