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Evelyn Zwiebach

Enterprise Community Partners

Detroit, Michigan

Reimagining Land Contracts

Summary

Advancing good-faith land contracts through policy reforms and programs that protect buyers, but retain the flexibility and efficiency that make the tool a powerful, alternative path to homeownership.

Description

Land contracts—a tool that has been used to devalue homes in Black communities—can and must be reformed to create value and deliver on the central promises of homeownership: stability, wealth, and community. Historically, predatory land contracts have been used primarily in Black communities due in large part to the racist mortgage lending policies in place for much of the 20th century.

Yet land contracts are not inherently predatory; rather certain features and a weak regulatory landscape make them ripe for abuse. This roadmap for reform includes policy and programmatic interventions that protect buyers and retain much of the flexibility and efficiency that make land contracts a powerful alternate pathway to homeownership. Land contract reform would advance racial equity and increase the value of homes in all three dimensions. Good-faith land contracts make homeownership accessible, allowing credit-constrained households to circumvent barriers to mortgage financing, such as large down payments, credit requirements and appraisal issues.

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