What is a leasehold?
Leaseholds offers a unique opportunity for homebuyers to enjoy the benefits of owning a home. With Cedar, you can co-own the land, reducing your monthly costs and making home ownership more affordable.
You buy the house, but lease the land
We cover 20-50% of the total purchase price by buying the land, while you own the home with a traditional mortgage.
You lease the land from us for 99 years, paying a manageable annual ground rent.
This unique approach reduces your upfront costs and makes homeownership more accessible.
Getting a Leasehold Property with Cedar
Homebuying is complicated enough. We make getting your leasehold property simple and straightforward.
Find a home you love
Explore freely knowing that Cedar is here to help with the downpayment and mortgage
Finance with Cedar & Homeward
Start an improved mortgage with your lender
Buy the home from the seller
Cedar buys the land from the seller with cash upfront
Enjoy it as long as you want
Pay ground rent to Cedar at a much lower rate than a mortgage for the land would cost
Enjoy full use of the house, the land—everything
Sell it (or don't)
Sell the home or the whole property whenever you want
Purchase the land from Cedar whenever you want
FAQs
Find answers to commonly asked questions about leasehold properties and Cedar's approach.
As part of a regular mortgage Cedar enters the transaction with you, and buys the land
The result of the transaction is a standard, but less common form of property ownership called a leasehold (not to be confused with a lease)
The homebuyer becomes the titled owner of the home with a 99-year leasehold on the property
The money Cedar contributes reduces the size of the homeowner's mortgage and is sent to the seller at closing
Since the leasehold itself is a titled piece of property, Cedar works alongside conventionally underwritten conforming (“QM”) loans produced by lenders everywhere
The title for the property is split in two, the homebuyer receiving title to the home and a 99-year land lease, while Cedar gets title to the land
With traditional ownership, the land and the building are owned by the same party. With a leasehold, the homeowner owns the home, and all improvements to the property, and has exclusive right to use the land for a duration of 99 years and pays ground rent.
With a leasehold, ground rent is paid by the homeowner to Cedar for the right to use the land
Significantly Lower Costs
- Lower monthly costs
- Less debt for the homeowner
- Cedar lowers your debt-to-income ratio which can lower your mortgage's interest rate
- Cedar lowers your debt-to-income ratio which can improve your budget
- You get all the tax benefits of homeownership (interest deductions, primary residence capital gains exemption, and depreciation).
For a more detailed breakdown of savings, please visit our calculator
Flexible Structure
- Option to purchase land rights at any time
- Allows homebuyer to choose the mix of downpayment and monthly savings based on their needs
- Home owners can request a ground lease extension
- Ground rent remains consistently tied to inflation - what you pay in today's dollars is roughly what you pay in tomorrow's dollars.
- Since Cedar contributes money to the transaction your loan amount may end up getting reduced below the 'conforming limit' under which interest rates become much more favorable.
No drilling for oil, mining, or mineral extraction.
You cannot change the property usage from single family residential.
No metal smelting or leather tanning.
You may not sell air rights.
These are the major restrictions, but as you might imagine, the lease agreement has the details
The closing process with Cedar is the nearly identical to a traditional home purchase. There are additional documents included in the process, but Cedar works within the typical origination and closing process and timeline.
Generally, yes. As long as the leasehold has 5 or more years remaining than the mortgage term, it is possible to purchase a leasehold with a qualified mortgage. So for a 30-year mortgage, the leasehold would need to be a minimum of 35 years. Cedar's are 99 years!
The leasehold is fully transferable, and the next buyer will continue to pay ground rent. Cedar does not need to be consulted in the transaction. Alternatively, we can help you list your home as a traditional ("freehold") property
Ground Rent is set at the beginning of the leasehold and is fixed in real terms for the duration of the 99-year lease. Ground rent is adjusted annually based on inflation reported by the US Bureau of Labor Statistics Consumer Price Index (CPI) for the subsequent year.
At the end of 99 years, the land rights revert back to Cedar. However, with the ability to purchase the land rights from Cedar or request extensions to the lease, we provide the tools to ensure future generations can remain homeowners.
Cedar invests in land because it's a stable asset that tends to increase in value, offering a low-risk addition to our investors portfolios. By buying the land and leasing it back to homeowners, we help reduce their upfront costs, making homeownership more achievable. This arrangement allows homeowners to invest in the value of their home without putting all their wealth into one asset, maintaining financial flexibility. It's a win-win: Cedar gains a dependable investment, and homeowners access more affordable homeownership without compromising on benefits.
Discover the Leasehold Advantage
Learn how Cedar's leasehold program can make home ownership more affordable.
