The Trust Montana resale formula is designed to allow homeowners to earn equity without allowing the home to reach an unaffordable price for future buyers.
Trust Montana’s resale formula allows home owners to collect 100% of their earned equity (the amount they’ve paid down on their mortgage) when they sell PLUS unearned equity in the form of a simple interest gain of 1.5% per year of ownership. This calculation is used to provide the homeowner the maximum resale price they are allowed to sell the home for. The maximum resale price is not a guarantee that the home will sell for that much, as the surrounding market and the condition of the home can affect the salability of any home – even CLT homes.
Because market fluctuations are impossible to predict for the long term, the resale formula includes a fail-safe switch to allow for situations wherein the market has changed in an unexpected way.
So, the Maximum Resale Price when a homeowner chooses to sell shall be the lesser of the below two options, A or B, plus Capital Improvement Credit as defined in the lease:
A) Formula Resale Price using the following formula:
- the amount of the home owner’s Base Price, plus
- simple interest at a rate of 1.5% of the purchase price annually.
Or,
B) A Consumer Price Index Resale Price calculated as follows:
The Consumer Price Index inflationary change, calculated from the base price in the month and year of homeowner’s purchase of the home to the month and year of the home owner’s listing of the home for sale. The increase standard calculation shall be derived from the Bureau of Labor Statistics online calculator: https://data.bls.gov/cgi-bin/cpicalc.pl
