The City of Lakes Community Land Trust, a small but powerful Minneapolis-based nonprofit that helps low-income families buy houses, received a significant grant from the Bank of America's Neighborhood Builders program to help increase the number of families it can help.

The two-year $200,000 grant, which represents nearly a quarter of the group's annual operating budget, comes at a critical time for the organization and for low-income families. With home prices on the rise in the Twin Cities and deeply discounted foreclosure listings dwindling, it's becoming more difficult for cash-strapped families to buy houses.

"This is incredibly significant," said Jeff Washburne, executive director of City of Lakes Community Land Trust (CLCLT). "As the housing market picks back up, I think there's a great opportunity to put the various tools on the table that we employed over our housing history to see what worked"

With the housing market on the mend and mortgage interest rates up compared with last year, a monthly measure of housing affordability had fallen nearly 15 percent in the Twin Cities metro last month, according to the Minneapolis Area Association of Realtors. That's putting increasing pressure on dozens of Twin Cities organizations, including Habitat for Humanity and Project for Pride in Living, to deepen their support for the most needy families.

For CLCLT, which has a staff of just three full-time workers and one part-time employee, the award includes leadership training.

Over the nearly dozen years the organization has been in business, it has helped nearly 180 low and moderate-income families buy homes in Minneapolis through an arrangement that keeps those houses permanently affordable.

On the initial purchase CLCLT makes houses more affordable by rehabbing the house and selling only the structure to the buyer. CLCLT maintains ownership of the land, which is leased to the buyer through a renewable 99-year ground lease. Long-term affordability is achieved by a resale formula that determines the home's resale price and the homeowner's equity at the time of sale.

Aside from keeping the home affordable, the ground lease is also a way to keep the homeowner connected to the community.

"It's more than just helping somebody buy a home," said Washburne.

The model has also been lauded for its ability to help stabilize neighborhoods hit hardest by the foreclosure crisis, including parts of north and south Minneapolis neighborhoods where most of the CLCLT houses are located. Washburne says that the average household income for those homeowners is just $33,000 a year and only eight buyers have fallen into foreclosure.

Dan Statsick, Minneapolis-St. Paul market president of Bank of America, said that he hopes the grant will help deepen CLCLT's impact on the community.

"CLCLT is an invaluable leader in serving our most vulnerable residents with affordable homeownership opportunities and ensuring better lives for so many in our community," he said.

Jim Buchta • 612-673-7376