Cedar Leaseholds offers a leasehold financing structure to help homebuyers acquire property with a lower initial cost and reduced mortgage debt. This model separates the home purchase from the land acquisition, allowing buyers to pay ground rent instead of a full mortgage on the land. Buyers maintain equity building rights, flexible payment options, and the ability to purchase the underlying land at a later date.
Funding
Funding not disclosed
Founders
Product
Problem
Rising home costs, high mortgage rates, and financial insecurity are preventing many prospective homebuyers from qualifying for a mortgage and achieving homeownership. This creates barriers to building wealth and achieving long-term financial stability.
Solution
Cedar offers a land lease model that reduces the upfront cost of homeownership by separating the price of the home from the price of the land. Cedar purchases the land, allowing buyers to purchase the home with a significantly lower mortgage and down payment. Homeowners lease the land from Cedar with predictable ground rent payments, and they have the option to buy the land back at any time. This model makes homeownership more accessible, reduces monthly mortgage payments, and allows homeowners to build equity while maintaining control and flexibility. Cedar also offers a cash-out option, allowing existing homeowners to unlock equity without incurring debt by selling the land while retaining ownership of the home.
Target Audience
Cedar serves first-time homebuyers, individuals with high debt-to-income ratios, and those seeking to lower their monthly housing costs, as well as existing homeowners looking to access their home equity without incurring additional debt. Cedar also partners with lenders and real estate agents to expand their customer base and close more deals.
Features
- Reduces the home purchase price by up to 65% by separating the cost of the land
- Lowers down payments and monthly mortgage payments
- Provides a 99-year leasehold with the option to purchase the land at any time
- Offers predictable ground rent payments adjusted annually based on inflation
- Simplifies the mortgage approval process, potentially avoiding jumbo loans
- Allows homeowners to renovate, expand, or sell the home at any time
- Enables homeowners to deduct property taxes and mortgage interest
- Offers a cash-out option for existing homeowners to access equity without debt